Commissioners look at recalling bonds
By Dean Shipley
Madison County commissioners on Monday morning discussed financial issues with the county treasurer and the advisor on bond investments.
Jennifer Blaser, an attorney with Peck Shaffer, who serves as bond advisor to the county commissioners, said they have an opportunity to make some financial gains if they choose to call some bonds early.
Blaser said some of their bond investments can be called early and can potentially save money. She said bonds with a current value of $630,000 and with an interest rate of 5 percent as of Dec. 1.
Those bonds, issued on the engineers office (originally in 1999 for $3 million) can be recalled and be re-issued at 2.75 percent and pay off the original bonds. Specific figures were not available.
Blaser will return to the commissioners office next week with the specific numbers and details in regard to exact dollar savings.
“It would make sense to move forward,” Commissioner Paul Gross said.
Blaser said some of bonds issued are not callable early. They are sold with the intention of the investor collecting the principal and the accrued interest together at the redemption date.
“They are not subject to redemption early.
“You can’t call them early,” Blaser said.
Those bonds were those issued in 1999 for $2 million for the human services building.
Blaser said the recall transaction was discussed earlier this year, but by waiting until Dec. 1, the county avoided a penalty fee of $6,000.
Treasurer Donna Landes said a service fee in 2011 has become in 2012 a credit. She will use that credit to offset any fees the bank would issue for investing “couple million dollars” in money market investments for a few months.