County seeks debt savings
County officials could save as much as $14 million in debt service next year if they can find a way to postpone issuing $130 million in school construction bonds.
Financing schedules for county school construction and expansion at Guilford Technical Community College total $130 million.
“But if we could delay that to December, we could save $10 million on the debt service and $14 million if we can delay until June 2014,” Reid Baker, county finance director, told the Guilford County Board of Commissioners recently.
Commissioners decided to work with school officials on project needs and cash flow projections to see if they can work together for savings.
“We need to be on the same path,” said Democratic Commissioner Carolyn Coleman.
“Do we have a choice?” said Democratic Commissioner Kay Cashion. “Voters approved these bonds.”
County outstanding debt as of June 30 totals $901 million. With little or no growth expected in sales and property taxes, county officials are looking for ways to reduce the debt stream in other ways. The county’s $45.4 billion property tax base grew at just 1.9 percent last year. Debt payments account for about 16 percent of the county budget.
“We have to look at our capacity to pay this debt,” said Republican Commissioner Jeff Phillips. “If we do not have the capacity, we should not extend the debt.”
As the school district’s construction program winds down, the county may be able to save money if the school district uses none or just some of the $74 million left over from the canceled high school once planned for the northwestern section of the county. Several parent groups, including parents at High Point Central High School, have lobbied the Guilford County Board of Education for renovations financed from the $74 million.
“We have to decide if the county wants to redirect the $74 million,” said Michael Halford, county budget director. “We need to talk about the alternatives.”
Bond markets also are a factor for timing bond issues. Rates could rise next year.
“It could be more difficult with the rates later,” said Republican Commissioner Bill Bencini of High Point.
2008: Most of the county’s debt comes from $457 million for school district construction, $79.5 million for Guilford Tech projects and $115 million for the downtown Greensboro Detention Center. Voters approved those projects in 2008.
Deadline: The county must issue the remainder of $270 million in authorized bonds by 2018. Guilford County has a AAA bond rating.