Greenfield Daily Reporter - May 16, 2013
Refinancing library bond saved more interest than anticipated
GREENFIELD — Refinancing the Hancock County Public Library’s building bond will save about $450,000 in interest, officials say, which is more than what was originally anticipated.
The library board and Hancock County Council have been talking about refinancing the $4.45 million bond since February. Financial adviser Greg Guerrettaz had said since interest rates are at a historic low, the library could see a savings of roughly $300,000.
But this week, the library board signed off on final paperwork, and members were pleased with the result.
“We’ll save almost $450,000 over the 10-year period,” said Dave Gray, the library’s director.
“We appreciate this, and the public appreciates this,” said Beverly Gard, board president.
The bond was issued to build the main branch in Greenfield in 2005. While the interest rate previously averaged 4 percent, the new interest rate through Piper Jaffray investment bank is 2 percent. The bond should be paid off by 2024.
Gard said ultimately the savings in interest will make the library more financially stable.
“It’s certainly a hedge against budget cuts and that sort of thing,” she said. “We’re always at the mercy of the economy, so it certainly is a hedge against that.”
Gray added that the savings offers the library more budget flexibility in the future. As e-books, downloadable audio books and digital magazines are areas of highest growth in circulation, the savings could go toward boosting those programs.
“We’d like to take that money and put it right back into service – in this case, it’ll be collections,” he said.
In another financial move at the board’s meeting on Tuesday, the board officially agreed to a resolution to keep its portion of the Economic Development Income Tax rate at 0.10 percent for 2014.
Hancock County is the only county in the state that uses income taxes to fund its library systems. The rate is adjusted regularly; it was lowered from 0.15 percent to 0.10 percent for 2013 because the fund has a healthy reserve. Guerrettaz has said the rate can remain at the 0.10 percent figure next year as well because of a $2 million cash reserve by the end of this year.
Next, it will be up to the Hancock County Council to set the EDIT rate for next year. Council members, however, have publicly discussed increasing the rate for a one-year boost in funds for roadwork.
The council will discuss the rate further at a May 23 budget committee meeting.