Erie County Executive Mark C. Poloncarz said Wednesday he would turn to the county’s state-appointed control board next year to refinance the county’s old debt at a savings of $2.6 million and to borrow money for large projects.
Poloncarz earlier this year turned down a proposal from the Erie County Fiscal Stability Authority to refinance bonds and to conduct the borrowing for county capital projects, despite potential savings from the deal.
The county executive said Wednesday that the latest plan would refinance bonds from 2003, 2004 and 2005, and would save the county an estimated $2.6 million during a 12-year period because of more favorable borrowing conditions. The county’s debt payment would be reduced by an average of $221,772 each year during the 12 years, his staff reported. The savings next year is estimated to be $330,634.
If approved by the County Legislature, the new transaction would be conducted in conjunction with the control board next spring as the county issues bonds for large capital projects.
Legislators earlier this year had urged Poloncarz to allow the Fiscal Stability Authority to conduct the 2012 borrowing and to refinance previously issued bonds. The authority in May estimated it would save the county $1.6 million during a 12-year period by refinancing older debt.
The latest plan would save additional money because it would refinance more bonds and take advantage of lower rates than were available earlier this year.
Poloncarz said he wanted to wait until the spring of 2013 to refinance the bonds to attain a greater savings for the county, as compared with the savings projected had the county refinanced last spring, as some had called for.
The control board has been able to borrow at a lower cost than the county because of lower interest rates it can get because of its better credit ratings.