New water bonds save $2.9 million
Ottawa County will realize the savings over the next 17 years.
Ottawa County has “refunded” its 2007 bond issue for its water supply system, with an estimated cost savings of almost $3 million over the next 17 years, according to an announcement by county officials.
When a government entity refinances its bond debt, it is called “refunding,” according to GVSU finance professor Gregg Dimkoff.
The successful sale of the Ottawa County Water Supply System Refunding Bonds, Series 2015, yielded $30,845,000 at an interest rate of 2.99 percent. The new bonds, which will mature in 2032, will save the water system rate payers approximately $2,989,645 in interest over the next 17 years.
The water system serves Georgetown, Holland, Jamestown, Olive, Park and Zeeland townships, plus the city of Hudsonville.
Karen Karasinski, Ottawa County fiscal services director, said the original water system bonds were issued in 2007 at an interest rate of 4.73 percent.
Ottawa County officials were assisted in the sale of the bonds by their financial advisor, Public Financial Management of Ann Arbor. PFM requested that Moody’s Investors Service evaluate the county’s credit quality, which resulted in an underlying rating of “Aaa.”
An Ottawa County news release said Moody’s cited the county’s “well managed financial operations, supported by solid reserves and revenue-raising flexibility and low direct debt burden.”
The Michigan office of St. Louis investment brokerage firm Stifel worked on the new bond issue, with bond counsel being Dickinson Wright.
Brenda Voutyras, a managing director at Stifel, said the county’s bonds “were well received by the bond market. We experienced good demand and were able to take advantage of historic low rates that met the goals of the county and resulted in a very nice savings for the county and the water supply system.”