NEW BOSTON, Texas—Bowie County officials are looking at refinancing U.S. Highway 82 bond indebtedness to save interest money, stabilize the property tax rate, grow the fund balance and improve credit ratings—all at once.
Earlier this week, county commissioners approved allowing county officials to work with a Dallas-based holding company to refinance to the U.S. 82 bond pay-offs by locking in on a lower bond payment interest rate as soon as one becomes available, said Bowie County Judge James Carlow.
In 2012, the county sold $34,910,000 in bonds in order to pay for widening a slightly more than 9-mile section of U.S.82 stretching from its intersection with Interstate 30, roughly 3 miles west of New Boston, to most of its route to DeKalb, Texas.
Presently, the county is paying about a 5 percent interest rate on the bonddebt and it has managed to pay off about $4 million in principle debt on the bonds, which currently have a 25-year pay-off schedule.
Earlier this week, Marti Shew, director of the Dallas-based Hilltop Securities Holding Co., told commissioners that the interest rate, as well as the payment life span on the bonds, could be reduced in the same way in which a home is refinanced.
Shew told county officials Monday that it may be possible to lower the county's interest rate percentage possibly to 3 percent as well as reduce the bond pay-off period from about five to seven years. Such a refinance would result in potentially allowing the county to save as much as $9.1 million over the full bond re-payment period.
Carlow said that such a savings could potentially allow the county to stabilize its property tax rate of about 42 cents per $100 valuation, as well as help contribute to the county's overall year-to-year fund balance.
Upon selling the bonds in 2012, county officials raised the property tax to as high as 47 cents per $100 valuation on real property. However, in nearly the last three years, county officials have managed to reduce property taxes to 42 cents as well as increase the fund balance.
"Having a healthy fund balance also helps the county's bond rating and that makes it easier to conduct business with bond companies," Carlow said.
Carlow added that a healthier fund balance and bond rating can also potentially encouraged industry to move to the county.
Bowie County Auditor William Tye said Hilltop Securities will be monitoring the interest rate market and will notify county officials as soon as a desirable lower interest shows up.