The Grand County Council voted 6-1 on Tuesday, April 15 to issue and sell a new bond to JP Morgan Chase & Co.; Patricia Holyoak opposed Elizabeth Tubbs’ motion.
As it is, the county has an outstanding balance of just under $1.5 million on two 1992-era bonds that funded improvements to the Grand County Courthouse and the Grand County Jail.
The county is expected to pay off the remainder of the balance in 2022.
With eight years left to go now, Zions Bank Public Finance Vice President Alex Buxton said April 1 that the county has a chance to knock the interest rate down considerably. He estimated that the move would save the county at least $20,000, and perhaps more than $30,000, over the remaining life of the bond.
However, Grand County Council Administrator Ruth Dillon put the final savings closer to $40,000, based on the lowest refinancing proposal that the council selected.
JP Morgan Chase was one of seven bidders that responded to the county’s April 1 request for proposals, and its lowest bid knocked the interest rate down from the current 3 percent to 1.944 percent, according to Dillon.
The council’s resolution to move forward with the bidding process was not exactly reader-friendly. A single sentence, for instance, runs on for more than 246 words, and the document is also riddled with financial jargon that a layperson might not understand.
That created some initial confusion among council members, who said they wanted to ensure that the county would be saving money over the long run.
“I’m extremely nervous about this process,” Grand County Council member Gene Ciarus said April 1.
Despite those concerns, Buxton suggested that the refinancing plan itself should not generate any controversy.
“Generally speaking, we never see anybody protest the saving of taxpayer money,” he said.
Grand County Clerk Diana Carroll worked with Buxton on the proposal, and said she doesn’t see any downsides to the move.
“I think it will be a huge savings to the county,” she told the council on April 1.
Property owners, in turn, would benefit from adjustments to the county’s certified tax rate, according to Carroll.
“The rate is based on [the bond payment], so if that is lowered, there would be a lower payment for property owners,” she told The Times-Independent on April 8.
Tubbs wasn’t quite as enthusiastic about the idea, but she agreed that the plan would save taxpayer money.
“Even though this is not a huge savings, it’s a savings,” Tubbs said April 15. “It seems like a no-brainer to me.”
The savings will come after the county factors in a $20,000 broker’s fee to Zions Bank, along with just under $4,000 in bond counsel fees, according to Dillon.
Buxton anticipated that the county might be able to close on the new bond some time in mid-May.