Officials Accept Bids to Refinance Metro 9-1-1 Call Center
Paul Fallon, Charleston Daily Mail (West Virginia) Staff
Kanawha County officials hope to save a little over half a million dollars by refinancing the 7-year-old Ned Chilton Metro 911 Center.
The Kanawha County Building Commission opened bids for the refinancing package last week, Commission President Kent Carper said. Five financial institutions submitted bids for the refinancing.
The best deal appears to come from Chase Bank, according to a memo from Bill Chambers, a certified public accountant and a partner with Brown, Edwards & Company L.L.P. Chase Bank offered a 2.5 percent fixed interest rate on the bonds.
Chambers is a financial analyst for the Metro 911 board.
The current interest rate for the bonds, which are financed through Crews and Associates, is about 4.25 percent, Chambers said.
The deal with Chase Bank would mean the Metro 911 Center board would accrue a savings of about $520,000 three years after the debt is paid off, he said.
The Metro 911 Center board of directors would pay $28,050 a month to pay off the tax-exempt bank bonds, Chambers said. The building commission now pays about $26,250 per month on the bonds.
“I believe this is a manageable annual increase in debt service,” Chambers wrote in his memo.
This means the building commission, which technically owns the structure, would pay the debt off in another 10 years instead of 13, Metro 911 Director Carolyn Charnock said.
Tax-exempt bank bonds are basically a loan from a bank, he said. However, the bank does not have to pay taxes on the interest received from the borrower, Chambers said.
The building commission technically owns the structure, but it is leased to the county commission who subleases it to the Metro 911 board, Charnock said. Therefore, the funds to pay the debt come from the 911 Center’s budget, she said.
The 911 Center’s budget is made up of fees tacked onto all landline and cellular phones, Charnock said.
The building commission borrowed around $4 million to pay for the construction of the Metro 911 Center in 2004. They were to pay an additional $2.18 million in interest over 20 years.
The Metro 911 board currently owes about $2.9 million on the building, Chambers said. Under the old terms, the board would have paid about $930,000 in interest moving forward, he said.
But, under the new package, the agency would pay about $360,000 in interest moving forward, Chambers said. The agency will also pay about $50,000 in administrative costs, he said.
“I absolutely think this is a good deal,” she said. “It’s just like refinancing your house.”
Carper also believes the move is a good deal and will save the Metro 911 Center money in the long run even though the monthly payment will increase. Carper asked that the building commission hold a special meeting last week to discuss the refinancing package.
“We’re probably the only government in the world that goes out and increases our monthly payments to save money in the long run,” Carper said. “The fiscally responsible thing to do is increase the payments and cut the time we’re paying on it.”
Carper believes that the original deal negotiated with Crews and Associates Investment Bankers in 2004 was a good one. But, Carper said that the 2004 interest rates do not compare to those offered today.
The original deal stated that the county could not refinance the debt until August of this year, Carper said. Therefore, last month, Carper asked the building commission to begin looking into refinancing the debt.
“I’ve been on top of this,” he said.
The Metro 911 Center’s finance committee will look at all five proposals during a meeting Wednesday at 11 a.m. in the facility’s conference room. The finance committee will make a recommendation to the building commission.
The building commission will meet Thursday at 8:30 a.m. in the county commission chambers to discuss the proposals and the Metro 911 Center Finance Committee’s recommendation.
The building commission will have to read an ordinance allowing for the refinancing to take place twice. The first reading is Thursday.
The date of the second reading will be set at the Thursday meeting.
The building commission will then pass the matter onto the county commission, Carper said. The county commission will only have to read the ordinance authorizing the refinancing deal once, he said.
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Paul Fallon, Charleston Daily Mail (West Virginia) Staff |
Kanawha County officials hope to save a little over half a million dollars by refinancing the 7-year-old Ned Chilton Metro 911 Center. The Kanawha County Building Commission opened bids for the refinancing package last week, Commission President Kent Carper said. Five financial institutions submitted bids for the refinancing. The best deal appears to come from Chase Bank, according to a memo from Bill Chambers, a certified public accountant and a partner with Brown, Edwards & Company L.L.P. Chase Bank offered a 2.5 percent fixed interest rate on the bonds. Chambers is a financial analyst for the Metro 911 board. The current interest rate for the bonds, which are financed through Crews and Associates, is about 4.25 percent, Chambers said. The deal with Chase Bank would mean the Metro 911 Center board would accrue a savings of about $520,000 three years after the debt is paid off, he said. The Metro 911 Center board of directors would pay $28,050 a month to pay off the tax-exempt bank bonds, Chambers said. The building commission now pays about $26,250 per month on the bonds. “I believe this is a manageable annual increase in debt service,” Chambers wrote in his memo. This means the building commission, which technically owns the structure, would pay the debt off in another 10 years instead of 13, Metro 911 Director Carolyn Charnock said. Tax-exempt bank bonds are basically a loan from a bank, he said. However, the bank does not have to pay taxes on the interest received from the borrower, Chambers said. The building commission technically owns the structure, but it is leased to the county commission who subleases it to the Metro 911 board, Charnock said. Therefore, the funds to pay the debt come from the 911 Center’s budget, she said. The 911 Center’s budget is made up of fees tacked onto all landline and cellular phones, Charnock said. The building commission borrowed around $4 million to pay for the construction of the Metro 911 Center in 2004. They were to pay an additional $2.18 million in interest over 20 years. The Metro 911 board currently owes about $2.9 million on the building, Chambers said. Under the old terms, the board would have paid about $930,000 in interest moving forward, he said. But, under the new package, the agency would pay about $360,000 in interest moving forward, Chambers said. The agency will also pay about $50,000 in administrative costs, he said. “I absolutely think this is a good deal,” she said. “It’s just like refinancing your house.” Carper also believes the move is a good deal and will save the Metro 911 Center money in the long run even though the monthly payment will increase. Carper asked that the building commission hold a special meeting last week to discuss the refinancing package. “We’re probably the only government in the world that goes out and increases our monthly payments to save money in the long run,” Carper said. “The fiscally responsible thing to do is increase the payments and cut the time we’re paying on it.” Carper believes that the original deal negotiated with Crews and Associates Investment Bankers in 2004 was a good one. But, Carper said that the 2004 interest rates do not compare to those offered today. The original deal stated that the county could not refinance the debt until August of this year, Carper said. Therefore, last month, Carper asked the building commission to begin looking into refinancing the debt. “I’ve been on top of this,” he said. The Metro 911 Center’s finance committee will look at all five proposals during a meeting Wednesday at 11 a.m. in the facility’s conference room. The finance committee will make a recommendation to the building commission. The building commission will meet Thursday at 8:30 a.m. in the county commission chambers to discuss the proposals and the Metro 911 Center Finance Committee’s recommendation. The building commission will have to read an ordinance allowing for the refinancing to take place twice. The first reading is Thursday. The date of the second reading will be set at the Thursday meeting. The building commission will then pass the matter onto the county commission, Carper said. The county commission will only have to read the ordinance authorizing the refinancing deal once, he said. |