Becker County saves $50,000 by waiting to refinance bonds
Sometimes it pays to wait a week or two.
Becker County was able to save about $200,000 -- as opposed to saving about $150,000 -- by waiting a few days to refinance capital improvement bonds.
The county accomplished this by not accepting any of the half-dozen or so refinancing bids it received from financial services firms at its meeting two weeks ago.
Because of an unusually high number of city and county bond offerings nationwide on that particular Tuesday, the interest rate was not as favorable as expected.
The county's bond advisors, Ehlers & Associates, suggested the county reject all the bids and ask one or more of the firms to negotiate on its behalf for a more favorable interest rate.
The county took the risk. It stipulated that it wanted to save about $200,000 and the deal had to be done before the end of the year.
In less than two weeks, Piper Jaffrey had come through with a deal.
The new agreement reduced the size of the sale from $5.55 million to $5.34 million, increased interest income and generated enough premium to increase the savings to just over 3 percent, or $198,828 over the 15-year life of the bonds.
The original bonds were issued to pay for the courthouse expansion and remodeling project.
Becker County is considered an excellent credit risk due to a low debt burden and solid tax base.
County Board Chairman Larry Knutson complimented Auditor-Treasurer Ryan Tangen for his work on the bond refinancing.
"This was all you, Ryan, you did the work on this," he said.
"I had a lot of help," Tangen replied.