James City County has refinanced bonds issued in 2005 to fund the construction of Warhill High School and Wanner Stadium, resulting in more than $6.5 million in savings over the life of the bonds.
The refinancings created an average annual savings of $530,000 for the county, according to a James City County news release.
The new bonds were sold in late July, creating new balances of $21.6 million for the general obligation bond used to fund the construction of Warhill High School and $12.58 million for the lease revenue bond used to fund the construction of Wanner Stadium and some other projects in the area, according to James City County Financial Management Services Director John McDonald.
“It’s like refinancing a mortgage or a car loan,” McDonald said of the county’s move to refinance the bonds.
The county was able to use its bond ratings — AAA from Standard and Poor’s, Aa1 from Moody’s and AAA from Fitch — along with favorable conditions in the bond market to get better interest rates on the bonds. Excellent fiscal management practices, a low ratio of debt to revenue and a stable economy were cited as main reasons for affirming those ratings, according to the release.
The refinancing reduces annual spending without increasing the life of the loan or the amount owed.
“The county is very proactive in monitoring its debt portfolio for possible savings opportunities and was in a great position to take advantage of excellent interest rates,” Courtney Rogers, the senior vice president of Davenport & Company LLC and county financial advisor, said in the release.
David Rose, the senior vice president and co-manager of public finance with Davenport & Company LLC, told the James City County Board of Supervisors in July that “better than preliminary savings levels, in part, as a result of the County’s conservative financial management practices,” were to thank for the refinancing.
“These practices have led to the strong ratings which resulted in nine aggressive bids for the General Obligation sale and eight aggressive bids for the Lease Revenue Bond sale from a diversity of national, regional and local banking institutions,” Rose said in the release. “As a result the bond sales produced outstanding savings results for the County.”