New bond issuance to save township money

Bloomfield Township trustees unanimously approved a resolution at their meeting on Monday September 14, that will allow two series of general obligation limited tax bonds, which had been issued when interest rates were higher, to be refunded and reissued at a substantially lower rate. The previous bonds had been issued in 2011. Since the bonds are secured by two different sources of revenue, they will be refunded in two different series – the 2011A bonds are secured by the township's sewer revenues and the 2013 bonds are secured by the township's water revenues. When the bonds were originally issued the 2011 they carried an interest rate that ranged from 4 percent to 4.5 percent, while the 2013 bonds had interest rates ranging from two to three percent, going out to 2030 and 2032, respectively. According to Laura Bassett, township attorney and bond counsel to the township, the new resolution authorized a total amount not to exceed $5 million to refund both issues. It authorizes the sale of these refunding bonds through a negotiated process with Huntington Capital Markets. The resolution also delegates to the supervisor or the treasurer the ability to finalize the terms of the bonds with Huntington Capital Markets within the perimeters that are set forth in the resolution. Lou Orcutt of Huntington Capital Markets said that those bonds in today’s market would have an interest rate just shy of 1.4 percent, and felt confident rates would stay where they currently are, putting the township well within the range to pursue a refunding of this size. “I think you’d be pressed to find lower interest rates,” he said. “It’s producing some great savings. It’s well within all the perimeters.” Both bonds are currently callable, he said, meaning there would be no penalties to the township for refunding them. Series 2011A is looking to generate about $379,000 in savings and the 2013 bonds will generate about $219,000 in savings, he noted, for a net cumulative savings of close to $600,000. Since 2014, by pursuing refinancing with the lower interest rates when opportunities have presented themselves, Bloomfield Township's refunding of bond debt service savings has been in access of $8 million over a 12-year period through 2032, which is when the final maturity ends on the 2019 bond series. “It really is a win-win situation for the township with these debt service savings,” Orcutt said.