Starke County Council, Commissioners Continue to Review Jail Bond Refinancing

An opportunity to lower the Starke County’s jail bond repayment continues to be researched by county government officials.

Andrew Mouser from Baker Tilly said a timetable is being prepared to approve the refinancing, but a formal approval may come at a February meeting.

He said a letter will soon be sent to banks and underwriting firms.

“We’re notifying them of the potential to re-fund the bonds and them giving them the ability to submit proposals to then underwrite the bonds.  It outlines the security on the bonds, the term, and various other bond perimeters,” explained Mouser.

It also allows the acquisition of proposals from different underwriters to compare them and then choose one to work with in this process.

The council and commissioners gave approval to move on with proposals. 

As presented in a previous meeting, Todd Samuelson from Baker Tilly explained that the council could approve an early redemption feature to refinance with a lower interest rate and pay off the bonds in 2032, or 18 months early, with a savings of nearly $9,000.

Other options include issuing new bonds to refinance or pay off the old bond and reduce the annual payment to save $20,000 annually, lift the debt service reserve with cash and fund with an insurance policy for $38,000 with a savings of $110,000 with the current interest levels, and refinance bonds but generate $1.2 million in cash to be used for facility updates at the jail.

Council President Dave Pearman said there are two options the government leaders are considering.

Pearman said, “We’ve looked at a few scenarios and got it down to two where one was a cash-out option and the other one was an early pay-off.  We’re either going to save money or save time – either way we’re going to save money.”

Mouser commented that rates are even lower than when the refinancing options were presented to officials late last year. 

More information will be presented to the council and commissioners in February.