ROGERSVILLE — The Hawkins County Commission will be asked to approve another refinancing resolution when it meets in regular session on Monday, but this time it’s expected to save $1.4 million.
Last week the commission met in special session and agreed to refinance approximately $15 million in debt that dates back to the 2002 Phase 2 county school construction project, which involved classroom additions and renovations at several schools.
That loan was maturing on April 1, and US Bank stated it wasn’t interested in extending the loan. Although there was no saving associated with that refinancing resolution, it did prevent the county from having to come up with a $15 million payment.
When the commission meets on March 22, however, it will be asked to approved a refinancing resolution for $18.6 million in debt which dates back to the Justice Center construction project and the renovation of the 185-year-old Hawkins County Courthouse.
County bond adviser Scott Gibson from Cumberland Securities told the Budget Committee on Monday that the old debt has interest rates from 2% up to 3.5%. The new bond issue will be locking in an interest rate of approximately 1.78%.
“We are actually going to pay a little more principle in the early years and less in later years,” Gibson told the committee. “We’re actually going to accelerate the debt payments slightly. We’re doing that because state law mandates that we do the debt as less debt … and we do not have to issue that as balloon debt.”
The payments for 2022-25 will be slightly more than they have been in the past. In 2026 the payments are going to fall down quite a bit and continue to decline over time.
The committee voted unanimously to forward the refinancing resolution to the full commission for consideration March 22.
On Monday, Gibson also gave the Budget Committee advice on one potential use for a portion of the projected $11.1 million in federal stimulus funding Hawkins County is projected to receive this year.
Gibson noted that this general debt service fund has been running unbalanced for several years, and the county commission has been budgeting reserves from the general fund to make up that shortfall.
There’s actually less revenue coming in versus expenses going out, so that fund has been unbalanced for several years,” Gibson told the committee. “Sooner or later we’re going to have to deal with that imbalance. However, as everyone in this committee is aware, the county is probably going to get about $11 million out of the new stimulus bill. Obviously, there are some needs in the county. Off the top of my head, one place that would be a good place for those funds is this general debt service fund to help make payments on the debt and to help get it structurally balanced.
Gibson added, “I figure its about $2 million to $2.5 million short over the next four years in that fund, so if you took that one-time money and put it in this fund, once those payments fall off in 2025, you would be in great shape.”
On Monday, Budget Committee chairman Mike Herrell announced he had appointed an ad hoc committee to advise the commission on how best to use its $11.1 million in stimulus funding.
That committee is comprised of commissioners Mark DeWitte, Danny Alvis and Nancy Barker; and citizens Woody Boyd, Jeff Ringley, Randy Patterson and Shelia Myers.
Herrell said he expects to announce the committee’s first meeting date when he returns from vacation next week.