AG 1992 09 21 - Laserfiche WebLink

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tCASA RUSCOU ] NDR1H CARDLiNA MEMO To: John Witherspoon, County Manager From: Blair Bennett, Finance Director Date: September 8, 1992 Subject: Debt Finance Issues The Local Government Commission, a division of the State Treasurers' Office, made a policy revision in July to allow counties to negotiate debt being held with a particular bank in its portfolio. Cabarrus County has two debt financing issues with Wachovia Bank, the Water and Sewer District Bonds and the Cabarrus County Governmental Center. The Water and Sewer District Bonds are a taxable issue with a rate of 10.35% for 20 years. The Cabarrus County Governmental Center is a non-taxable issue with a rate of 7.15% for 10 years. We have negotiated terms with Wachovia Bank for the refinancing of the Water and Sewer District debt. Wachovia Bank has agreed to reduce the current fixed rate to 8.18% for the first 10 years and to the bank's prime rate for the remaining 6 year term of the note, with a cap of 10.35% on the prime rate. This would result in a savings of $626,519 for the first 10 years, with a total estimated savings during the life of the note being $841,765. After reviewing the Cabarrus County Governmental Center's financing and new proposed rate reduction to 6%, there was a negative savings after paying prepayment penalties. Attached, please find a copy of Wachovia Bank's commitment letter, which has an expiration date of September 22, 1992, for acceptance by the Cabarrus County Board of Commissioners. I am also enclosing a resolution for passage by the Board of Commissioners in order to facilitate the requirement by the State Treasurers' office. I am recommending that the Board of Commissioners approve this refinancing. I will be present at the Commissioners' Meeting to answer any questions relating to this material. Finance Department P.O. Box 707 · Concord, NC 28026-0707 · (704) 788-8i04 /