Thanks to Davis County’s AAA bond rating – the highest possible – millions of dollars have been saved by taxpayers in recent bond issues.
“If the county had an underlying rating of AA rather than AAA (just one notch lower) obtained on the $27 million sales tax bonds issued in 2009, the county would have spent approximately $1.23 million more over the life of the bonds,” said County Clerk/Auditor Steve Rawlings.
For the $19.6 million recovery zone bonds, the county was able to save $2.79 million over the life of the bonds because of when they were issued, he said.
“In addition, we saved approximately $160,000 on the recent refinancing of the $1.6 million Department of Motor Vehicle building bonds,” Rawlings said.
Salt Lake County officials recently made a “big deal” out of the fact its bond rating had been restored to a similar AAA rating. At the time, they noted there are only 32 counties in the country with such a rating.
That’s out of a total of more than 3,000 counties, parishes and boroughs across the nation.
Just as credit ratings can help individuals, the bond rating often makes for better interest rates and resultant savings.
For example, the $19.6 million bond issued last December came in with a 3.06 percent interest rate which, with still relatively low construction costs, was well received by county officials.
“It appears the market has tightened a little, but we’re still very pleased, it’s still a favorable climate,” County Commissioner Bret Millburn said.
Officials were pleasantly surprised just over a year ago when bids for the new County Health Administration Building in Clearfield came in at more than $3 million lower than projected, in the $5 million range.
That allowed for almost immediate construction of the new North Davis Senior Activity Center, which is due to open within the next two months.
“This is a historic time for Davis County to have this kind of project savings,” Millburn said of Thursday’s bids.
“The savings from this project will be realized for years to come,” he said, referring to the 3.06 percent interest rate on the bond. Some $21.6 million in federal economic recovery bonds are being used. Typically, bond amounts are set several million dollars above anticipated costs to cover any contingencies.