Thanks to action taken by the Sampson County Board of Commissioners in October, the county is set to save more than $2 million after refunding 2015 bonds.
At the October board meeting, Finance Director Melissa Burton reported that her office had contacted the underwriting firm that assisted the county with the refunding of USDA debt in 2005 and 2007, in order to refund the bond debt from 2015, a total of $24.88 million.
“If the refunding is successful, the county will save approximately $1.7 million over the next 10 years without extending the payment terms of the original bonds,” Burton explained in October.
However, Andrew Carter with underwriting firm DEC Associates explained at the board’s meeting Monday night that the savings actually ended up being more than expected.
“We’ve been tracking this refunding since probably June where you get this past year, January of ‘25,” he said. “You know, the market, it goes up and down. When we first started tracking it, we were in about 5.5, 5.7 percent savings, which equated to about $1.4, $1.5 million total savings. When I was here in October, we were hovering around the 6.5 percent mark, it had gone up in our favor.”
By the time the actual sale of the bonds was reached, the county ended up with a total cash flow savings of just over $2 million over the next 10 years. “So $2,007,056,” Carter explained. “And so spread over the 10 years, that equates to approximately $195,000 in budgetary savings from what you were paying on this debt, what you will be paying for the next 10 more years on this one. So, a reduction of approximately $195,000 in savings.”
It ended up equating to a 7-percent savings, Carter said, for which he congratulated the commissioners. “You know, myself and us at DEC Associates as the financial advisor of this transaction, really just kind of try to help nudge the boat in the right direction as we’re going down, you know, the road or the river as we get to this transaction,” he stated. “It’s the county, that’s the boat, the captain, the engines and everything. So we can’t do any of this without you all leading.”
He gave kudos to County Manager Allen Vann and Burton, as well as county staff. “There’s a lot of hard work done by the county as far as information, putting together what we call the official statement, which includes a lot of data and information about the county to attract investors, to buy your bonds,” he said.
Carter further explained that there were three or four more times sales than there were bonds, which is good for the county. “So, there were hands that went unfilled, which is usually what you want, with a bond sale like that.”
The good news for the county on the bond refunding process doesn’t end there. Carter also explained that as part of the process, the county’s credit rating was upgraded. Standard & Poors updated the county to the AA- category, with the highest rating possible at AAA.
”That is essentially an indicator that you have very strong finances,” Carter attested. “With a higher credit rating, the better interest rates you’ll get. So not only were he able to capture savings in your budget going for the next 10 years, you’re actually able to upgrade your credit.”
This means that if the county chose to pursue any additional bonds or financing in the future, there could be additional savings and better rates, due to the improved credit rating.
Commissioner Lethia Lee thanked Carter and county staff for their work in getting the bonds refunded. “I just want to say that I appreciate all the hard work that you’ve done, along with our staff,” she told Carter. “You can’t do it by yourself and we can’t do it by ourselves.”
Board Chairman Allen McLamb said that the news shows that “we are structured and trying to move this kind of forward in a lot of different ways.”
He added, “There’s a lot of things going on behind the scenes people don’t see. And this is part of that, we want to make it as public as we possibly can. We want everyone to see what we’re trying to do, and we move forward.”