The Clay County Building Corporation met Tuesday to approve a resolution allowing the refinancing of the 2004 outstanding bonds for the Clay County Justice Center.
Jason Semler, Umbaugh and Associates, Indianapolis, presented the Building Corporation with preliminary documents to approve the market and sale of bonds to potential buyers. Semler said they would market the bonds looking for the lowest rate possible for the county.
Clay County issued bonds in 2004 to pay for the Clay County Justice Center. Due to lower interest rates, the Clay County Council and the Building Corporation looked into refinancing the bonds and are now moving forward with the process.
Originally, the jail bonds were to be paid off by 2034. With the refinancing, however, the bonds could be paid off by 2028, eliminating six years."The market has gone up quite a bit since we last met," Semler said. "It's important that we get in the market as soon as possible. As soon as you approve these documents today, we'll continue the process."
Once the pricing is finished, which can be done the first week in April, the interest rates and payments on the bonds will be solidified.
"Even with the increase in interest rates, you still have a substantial amount of savings," Semler said.
The county is estimated to have a gross savings of $3.7 million.
Semler said they are looking to close by the middle of April.
The Building Corporation approved the preliminary documents.
Meanwhile, Clay County Attorney Eric Somheil presented the corporation with an agreement to refinance the mortgage bonds, an agreement he also presented to the Clay County Commissioners during a special meeting last week.
The commissioners tabled the agreement until they could receive further information because they were unaware they would be involved in the process.
"Under the constitution (the county is) limited to 2 percent debt, and we get around that 2 percent debt by having the Building Corporation," Somheil explained. "This debt is held by the Building Corporation instead of Clay County. Your entity (Building Corporation) falls under the county executive -- that's why the commissioners are signing. But since this is the Justice Center, it is a project under the Building Corporation, so you have to sign too."
Somheil said the commissioners plan to approve the agreement at their April 2 meeting.