Commission to refinance looming debt
By Joel Davis (email@example.com)
The Blount County Commission on Thursday voted to refinance a looming $46 million balloon payment due in June.
The commission, with a vote of 13-4, directed County Finance Director Stephen Jennings to refinance the balloon payment plus the remaining $1.7 million of debt issued to build the Blount County Public Library as fixed rate debt.
Commissioners also voted to retain two interest rate swap agreements associated with the balloon payment that would cost the county $5.2 million, requiring an extra 6 cents of property tax to fund.
Jennings said that adding the $5.2 million to the county’s nearly $240 million debt would not be a good investment. “I don’t want to add to that burden. I’d rather work on a strategic plan to reduce that debt.”
Commissioners Tab Burkhalter Jr., Richard Carver, Gary Farmer, Ron French, Tom Greene, Brad Harrison, Scott Helton, Gerald Kirby, Peggy Lambert, Mike Lewis, Chairman Kenneth Melton, Jerome Moon and Gordon Wright voted for the plan.
Commissioners Tonya Burchfield, Mike Caylor, Mark Hasty and Monika Murrell voted no.
Commissioners Jim Folts, Roy Gamble, Holden Lail and Steve Samples were all absent due to illness or the illness of family members.
Caylor said he just needed more time to study the proposal. “I just need more time to absorb it. We’re talking a lot of money.”
The looming payment is the legacy of the county’s damage control efforts after the near-collapse of the nation’s financial markets in 2009.
It is better to get started on the refinancing as soon as possible, Jennings said.
“We have to borrow the money to pay it off June 1. It takes about 60 days to go through the process. My plan is to use March and April to get the money. That gives you a 30-day cushion. ... I’m just conservative. I’ve got 90 days to write a $46.6 million check. I don’t have $46.6 million. I’d like to go ahead and get the process started.”
Waiting could cost the county more money as well. “The interest rates could go up and you’d end up paying more,” Jennings said.
Asked if the loans would be made through the TN-LOANS program administered by Cumberland Securities, Jennings said no. “Much of Blount County’s debt was borrowed under this program. The underlying debt that was refinanced two years that created this balloon payment that is due June 1 was originally a TN-LOANS piece of variable rate debt. The refunding plan that is before you ... is traditional fixed rate debt that will have nothing to do with TN-LOANS, Cumberland Securities or the Blount County Public Building Authority.”
Audience member Carol Ross warned the commission to learn the lessons of the past concerning financial matters. “Hindsight is 20/20 if you look back, but if you don’t, it’s blind,” she said.
In other business, the County Commission approved County Mayor Ed Mitchell’s request to lower his salary by $15,777.
Veterans Affairs Officer Charles Staley announced at the meeting that he will retire on March 22 after 25 years on the job. “I appreciate the county commission as well as the county,” he said.