The Rogers County Board of County Commissioners approved a resolution Monday during its regular board meeting to refinance two bond issues to a lower fixed rate than the current rate.
The resolution was approved a week earlier by the Rogers County Industrial Development Authority (RCIDA).
The two bond issues approved for restructuring are for the Rogers County Courthouse and the 911 Center.
The restructuring of the debt will get rid of an approximate $3,849,000 balloon payment for the 911 Center. It would also bring a lower fixed-interest rate for both bond issues under one payment.
The courthouse bond issue is currently at 4.79 percent interest, while the 911 Center is at a five percent interest.
Greg Nieto, financial advisor for The Baker Group, told the commissioners in reviewing the bonds and the anticipated Federal Reserve rate increases this year, he said this is a "good move" to make.
He said the primary reason to refinance was to eliminate the balloon payment now that the rates are low. "We can still pay off early if the sales tax proceeds go up and can still retire the debt early without penalty," Nieto said.
According to a press release issued on March 15 by the Federal Reserve, their Open Market Committee is aiming to increase rates two times before the end of this year, after already increasing it once this year.
The proposed fixed rate is 3.8 percent and the new combined payment would be approximately $1.7 million or lower per year, which is a $50,000 to $60,000 increase per year by including the 911 Center, according to Nieto.
Nieto said the approach to lock into a lower fixed-rate for these two bond issues is beneficial for the county to take advantage of since the rate could change unfavorably in the future.
"Nobody has a crystal ball. We could come back in two years and if the rates are lower, we would be wishing we had waited. There is always that possibility. But this is a good move right now," he added.
The newly restructured bond is expected to close by June 1 and would stretch the 911 Center bond issue out to 2040.
