County Commissioners Approve Bond Refinance

The Montgomery County Commissioners approved an ordinance to refinance 2001 general obligation bonds at Wednesday's board meeting. The bonds would be refinanced through a refunding program.

Because from Moody’s Investors Service, the county will refinance its existing debt through a $35 million bond issue with a 1.997 percent interest rate, said Public Financial Management Managing Director L. Gordon Walker.

In the same ordinance, the county will also terminate a swap agreement made in 2001 in conjunction with the 2001 bonds. The termination will cost the county $7.9 million, said Walker, who is also the county’s financing consultant.

Walker said he believes termination is best for the county’s long-term interest because otherwise the county would have to refund bonds with a variable rate. He said when the decisions to engage in the swap agreement was made, the county had obviously not foreseen the Wall Street crash in 2008, which caused rates to drop. Originally, the county had received $2.2 million upfront from the agreement, and it “seemed like a positive move at the time,” Walker said.

“Had we known things we know now then, we wouldn’t have done it,” Walker said.

Commissioner Joe Hoeffel said it’s easy to be critical in hindsight, “but, boy, we really made the wrong decision.” He also said there is talk of banning swap agreements as many municipalities are now facing the same problem as the county.

Chairman James Matthews said it is important to note that the county’s finances are strong right now and was recently sited as the sixteenth wealthiest county in the United States according to a national study.

“Our county is certainly not overburdened with debt,” Matthews said.

Other county business

The county also approved a resolution to move forward with replacing Bridge No. 237 on Knight Road in Upper Hanover Township. Director of Roads and Bridges Donald Colosimo said they are ready to establish the final design for the bridge, and construction bids for the bridge will go out in 2013 or 2014.

The county health department will enter into a one-year contract with VaxCare, a preventative healthcare services provider, to conduct a new immunization program at three senior citizen centers in the county. The department will continue with its usual community immunization clinics along with the new program, said Ruth Cole, director of clinical services.

A contract with Loryx Systems, Inc. was approved for the county’s adult probation office. Chief Adult Probation and Parole Officer Michael Gordon said company will provide a case management system at no cost to the county. Minimal offenders will pay a $6 fee to the company, which is only a dollar more than they pay now, and they can engage in their own supervision by checking when they need to come into the office for tests either online or over the phone, Gordon said. Philadelphia and Bucks counties both use Loryx Systems, Inc. with success, he said.

The county also approved the Housing and Community Development’s 2011 Annual Action Plan, along with grants for the Public Safety Department’s firefighting foam concentrate, the county library’s overhead rolling door, Peter Wentz Farmstead upgrades and more.