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The James City County Board of Supervisors voted unanimously Tuesday to push forward with a plan to refinance millions of dollars of county debt at lower interest rates, a plan projected to save the county $4.8 million through 2030.
The county pays for major infrastructure costs like school construction by issuing municipal bonds. It then pays off the debt associated with the bonds over several years.
The refinancing encompasses three sets of bonds. The first, totaling $43,085,000, is from 2006. The money was originally used to build J. Blayne Blayton and Matoaka elementary schools and Hornsby Middle School.
By refinancing that bond, the county is estimated to save $3.6 million through 2026, resulting in an average annual savings of $327,000.
The other two sets of bonds were issued in 2005 and 2006 and total $15,260,000. They were used to purchase the land that is now Jamestown Beach Park and the Jamestown Yacht Basin and to fund upgrades at several county owned sites, including Chickahominy Riverfront Park, Freedom Park and the Warhill Sports Complex.
The plan seeks to refinance those bonds to save an estimated $1.2 million through 2030, with an average annual savings of $78,000.
Exact savings won’t be known until the bonds are refinanced next month. The estimates were reached using current interest rates on the bond market. The county will decide how to use any savings generated by the refinancing when it plans its next budget, a process that will begin late this year.
In addition to the refinancing, the county will also switch $3.5 million of debt associated with the purchase of the Jamestown Yacht Basin to taxable bonds. They were previously nontaxable bonds, which are used for the construction of public amenities like schools and parks, which are not anticipated to generate profit.
Taxable bonds are used for projects that may generate revenue. During a work session Tuesday, the supervisors decided to keep the yacht basin. The board had previously discussed selling the property but decided to say no to five proposals to purchase the land in May.
By switching to a taxable bond, it will allow the county to investigate the possibility of a partnership with a private entity to install a restaurant, brewery or other commercial venture at the site.
The refinancing is expected to take place next month.