Bond refinancing may save Seneca $284,000

2/15/2008

TIFFIN - Because of falling interest rates, Seneca County could save an estimated $284,000 if commissioners refinance slightly more than $5 million in outstanding bonds later this year, the board was told yesterday.

While the refinancing proposal is not related to the $8.5 million bond issue for courthouse restoration on the March 4 ballot, the board's bond counsel, John Larson of Squire, Sanders & Dempsey, said that if the ballot issue passes, the county would save money issuing bonds for that project because much of the preparatory work already would have been done for the refinancing.

Voters in Seneca County are being asked to decide a 0.72-mill bond issue that would support saving and restoring the 1884 courthouse, vacant since 2004. Commissioners have pledged not to collect the tax if it is approved, but have said they would use existing revenue to pay the debt service on the bonds.

Representatives of RBC Capital Markets yesterday told the board that interest rates continue to decline, which makes it a favorable time for borrowing. Paul Stubbin, RBC's managing director, said the county could save around $384,000 by refinancing bonds issued in 1998, although the cost to refinance would be around $100,700, resulting in a $284,000 saving from the time of the refinancing until 2023, when the bonds would be paid off.

The county is paying between 4.5 percent and 5 percent on the bonds, he said, but could get an interest rate around 3.4 percent that would be fixed through 2023.

Also yesterday, Commissioner Dave Sauber said he spoke with MKC Associates of Mansfield about the cost of demolishing the 1884 courthouse. He said MKC was sticking with its original estimate of $603,000 to tear down the massive stone structure and return the site to ready-to-build-on condition.

If next month's bond issue fails, both Mr. Sauber and Commissioner Ben Nutter have said they will move forward with razing and replacing the old courthouse with a smaller structure. The board has not called for bids for demolition nor does it have a plan for a new court building, but the two commissioners say they would not seek voter approval to pay for a new courthouse.

The 1884 courthouse will be open for public viewing from 1 to 4 p.m. tomorrow and Sunday.

"I welcome everyone to come and justify their vote," said Commissioner Mike Bridinger, who supports renovating the old courthouse.