The county issued bonds in 2004 to pay for the Clay County Justice Center. Due to lower interest rates, the council and the building corporation are looking into refinancing the bonds.
Previously, four companies presented their proposals for gross savings and income rates, including City Securities Corp., Fifth Third Bank, Morgan Keegan and Co., and Edward Jones Investing.
After much discussion, the Clay County Building Corporation accepted City Securities as the bond underwriter because it offered the most savings.
Originally, the jail bonds were supposed to be paid off by 2034. With the refinancing, six years will be eliminated, and the bonds could be paid off by 2028. Potentially, the bonds could be paid off even sooner if the economy improves.
The gross savings after refinancing could be approximately $5 million.
The bond payments are approximately $800,000 per year, but the county's income is approximately $960,000 per year.
The remainder of the money goes into a fund that cannot be used for anything other than paying off the bonds. During a six-year period, the fund has built up a balance of almost $1.9 million.
The council will approve a maximum appropriation of $1.5 million to use to lower the balance of the bonds, causing the surplus fund to contain only $500,000.
However, each year, more money will be added to the surplus fund, so over a period of time, the fund will build back up.
"In eight years, we should be back up to $2 million in that surplus fund," Clay County Council President Mike McCullough said.
Refinancing the bonds will save approximately $5 million, as well as decrease the number of years it takes to pay off the bonds.
The Clay County Building Corporation plans to move forward in the process.