CONYERS -- The Rockdale County Board of Commissioners approved Tuesday morning the refunding of $102 million in 2005 bond debt issued for the Water and Sewerage Authority.
The county anticipates a savings of $7.72 million over the remaining 16 years of the bonds, or about $475,000 per year. Actual present value savings projections are $6.1 million, but accounting for future value, the total rises to the $7.72 million.
Water and Sewerage Authority Chair Elaine Nash stated that the savings will likely be used to finance projects such as expansion of the sewer system in support of economic development. Nash said there are gaps in sewer coverage right along I-20, for example, in the area between Sigman and Flat Shoals roads. Lack of sewers along the expressway can be a deterrent to economic development, she said.
Nash said the Water and Sewerage Authority spends about 40 percent of its revenue to pay debt service.
"It will be something that we have every year that we don't have to spend on debt," Nash said.
According to the Municipal Securities Rulemaking Board, a refunding is basically a refinancing of existing bonds. In contrast, in an advance refunding the proceeds are not used to pay off the existing debt but are placed in an escrow account, with the proceeds used to pay the debt service on the bonds being refunded on their scheduled call dates or maturity dates.
The 2005 bonds to be refunded were issued in order to advance refund the Authority's 1996 and 1999A bonds, which resulted in a savings of $3.5 million. Those funds, in addition to $6.5 in additional bond proceeds, were used to fund water and sewer system improvements.
Editor Alice Queen contributed to this story.