CATSKILL — Greene County officials Thursday secured an interest rate a full point lower than originally expected on a $39 million bond for the construction of the new county jail in Coxsackie.
Robert W. Baird & Co. Inc, was the successful bidder, with an interest rate of 2.49%, according to a statement issued by the county.
“Interest savings will total $7,667,000 over the life of the bonds, which is about $255,000 per year,” according to the release.
Originally, county officials were going through the motions to borrow the money from the U.S. Department of Agriculture at 3.5% interest. But by going to the general bond market, the county is getting a considerable cost savings.
“Due diligence resulted in over $7 million of savings in interest costs on this project,” Greene County Treasurer Peter Markou said in a statement Thursday. “We received seven strong bids from well-respected financial institutions. The recent credit rating upgrade made a considerable difference in the rate and savings.”
County lawmakers passed a resolution last September to borrow $39 million for the project. The county was to contribute $8.1 million for the 60-bed facility.
Last week, the county’s bond rating was increased from Aa3 to Aa2 — the third highest rating for fixed debt.
The bond rating acts as a fiscal report card for the county, Greene County Administrator Shaun Groden said.
“What they want to read in this evaluation is that this county is going to pay us back, they are going to make their payments on time. This is essentially a report card,” Groden said.
Legislature Chairman Patrick Linger, R-New Baltimore, was pleased with the savings.
“The low interest rate exceeded our expectations, and will result in significant savings for the taxpayer,” he said. “Public safety is the county’s first priority and the jail and sheriff’s office will provide modern and efficient essential services.”
Groden attributed the results of the sale to proper budgeting, he said.
“The county’s finances are very strong,” he said. “We have been budgeting funds for the jail for several years, and when you factor the low cost of borrowing money with competitive construction costs, it’s the perfect time to build a public facility. The County’s decision to issue the bond sale was timed to be the most advantageous to the existing bond and investment market.”
Construction on the new jail off of Route 9W in Coxsackie began in late June.
The project is expected to take 18 to 24 months to complete, Groden said.