County Mayor Greg Marion said Tuesday that C.L. Overman, of Cumberland Securities, outlined the potential for savings by taking a fixed rate on the county's $11.4 million loan. Marion said the county currently has a variable interest rate on all its debt, and according to Overman, most localities have diversified their debt with a combination of fixed-rate and variable-rate loans.
"This is like putting all your eggs in one basket," he said, explaining how a variable rate can actually hurt a locality when interest rates go above what the county can afford to pay.
Marion said Overman explained how during the first Iraq war interest rates soared, and the current war could lead to a similar situation.
At the conclusion of Overman's presentation, commissioners as well as members of the audience had a number of questions for Overman concerning how refinancing could lead to savings and what the cost of the refinancing would be. Overman explained that although a refinancing would not change the amount of the current payment and that the payback term would remain the same, the savings would be realized over time because the interest rate would not go up.
The cost of the refinancing would be about one-half of a percent for bond counsel and the cost of selling new bonds.
Following the discussion, commissioners instructed Marion, County Attorney Bill Rhea and School Superintendent Mike Antrican to study the situation and bring a recommendation to the County Commission at a recessed meeting on Feb. 19, where it will be further discussed.
This recessed meeting was scheduled after commissioners agreed to table further discussion on the status of the Emergency Medical Services department, which is facing a shutdown on Feb. 20 if funding cannot be found prior to Feb. 20. Marion said Commissioner Willis Gibson suggested earlier discussion was needed, as meeting a day before funding runs out was "cutting it close." But commissioners voted for the later meeting over Gibson's objections.
Last week commissioners agreed to have the director of the Morristown EMS department look over the billing process and other aspects of the Hancock EMS department and make recommendations on actions that may help the department bring in more revenue.
The commission did approve two budget amendments that involved the transfer of funds from one line item to another but did not involve additional money, said Marion.
Commissioners then heard a lengthy debate on the pros and cons of a proposed National Animal Identification System before tabling action on that issue. Members agreed to take up the discussion again at the recessed meeting.