New bonds issued by the county will finance $2.9 million needed to complete three Bradley County Fire-Rescue stations.
The action came Monday in a session of the Bradley County Finance Committee whose members authorized the recommendation which later in the day was presented to the full Bradley County Commission, and ultimately approved.
Revenue to support the bonds comes from the Bradley County Fire Tax. This is separate from the rest of the Bradley County budget.
The county will also refinance $4.5 million in current debt to change it from a variable interest rate to a fixed interest rate. Like the firehall construction bonds, the debt refinancing measure was approved by the Finance Committee before being moved to the Commission’s voting session at the Courthouse.
During the Finance Committee meeting, Commissioner Jeff Morelock asked how much the county would save by switching to a fixed rate.
While there are costs associated with refinancing, the county will no longer have to pay the maintenance fee associated with having a letter of credit to back the bond, according to Chris Bessler of Cumberland Securities.
A fixed interest rate bond does not require a letter of credit or bond insurance.
The move will decrease the amount of risk in the county’s debt portfolio, Bessler said.
Bessler estimated the county could save approximately $65,000 by switching to the fixed rate. Estimates have the bid coming in at 1 percent interest and would not change the term length for paying back the debt. The refinanced bonds will be paid off in five years.
Another reason refinancing the bonds would be beneficial to the county, Bessler said, is because the international bank in charge of the letter of credit will not be renewing. This would mean the county would have to find another financial institution to back the bonds if they remained variable rate bonds.
Finance committee member J. Adam Lowe said getting another entity to carry the letter of credit could be more expensive than refinancing.
The committee also passed two budget amendments.
The first amendment accepted insurance money to replace destroyed Emergency Management Agency radios. The radios were destroyed while EMA personnel were extricating an accident victim. In a separate action, funds were transferred from the Bradley County Agricultural Extension Service’s part-time personnel budget to cover maintenance and repairs to the William Hale Agriculture Center cannery on Peerless Road.