Plan Saves Taxpayers More than $2.6 Million, Reduces Debt Service Payments Over Next 12 Years
ERIE COUNTY, NY— Today, Erie County Executive Mark C. Poloncarz commended the County Legislature on their unanimous vote approving a bond refunding resolution that is expected to save taxpayers more than $2.6 million over the next 12 years. The resolution will permit refunding of the series 2003B, 2004A, 2004C, and 2005A bonds, which is expected to reduce the County’s debt service payments by an average of $221,772 annually over the next 12 years, with $330,633.76 in savings for 2013 and similar savings in 2014-2015.
“I am glad that the Legislature realized the significant savings that could be attained by refunding these bonds in 2013 and not at an earlier date, as some suggested. We will now take advantage of historically low interest rates to save taxpayers more than $2.6 million over the next 12 years,” said Poloncarz. “By waiting until now to do the refunding, we have realized an additional $1.1 million in savings that would not have been available last year. While a refunding is no silver bullet solution, every little bit helps, and the more than $330,000 in savings we will see this year will assist as we work to rebalance the 2013 Budget.”
Refunding debt is a transaction where one older bond issue is redeemed and replaced by a new bond issue under conditions more favorable to the issuer. By waiting until early 2013 and including the 2004 Series A Bond in the refunding, projected savings to the County increased to $2,661,273.21 over the next 12 years, an additional $1,098,479 in savings over the previous refunding proposal rejected by Poloncarz last year.
The County will conduct the refunding in collaboration with the Erie County Fiscal Stability Authority (“ECFSA”) in early Spring 2013 in conjunction with the County’s 2013 capital borrowing for construction projects. By conducting both bond sales at the same time, the County and ECFSA will save additional money by reducing transaction expense.
Poloncarz continued, “I look forward to working with ECFSA Chairman Sampson on this refunding program. We have worked closely and cooperatively with him and his fellow directors throughout 2012 and now into 2013, and our efforts are paying off with an increased partnership resulting in greater savings to taxpayers.”