County restructures debt

Published 11:19 am Sunday, July 3, 2022

Cumberland County restructured debt in order to fund a radio system upgrade for its public safety departments.

On June 24, the county closed on the refunding and restructuring of debt. This effort successfully carved out a portion of the county’s near-term debt service that will be used to fund the majority of the radio project.

The radio project is estimated to cost about $2 million. It will help the first responders be able to quickly and efficiently communicate and respond to calls. Currently, parts of the county are dead zones.

The new debt service will be layered into the county’s existing debt with little to no impact on the county’s annual operating budget and debt capacity.

“We are very pleased with the outcome and results of this refinancing,” said Board of Supervisors Chairman Brian Stanley. “This helps the Board of Supervisors to solve an immediate need, maintains our ability to retire existing debt as scheduled, and saves the County money in the long term.”

In addition to the successful carve out and funding of the radio system project, Cumberland County was also able to maintain its significant decline in annual debt service beginning in the fiscal year 2031. The refinance of existing utility debt shortened those obligations by eight years from 2050 to 2042, saving the county about $580,000 in the process.

Quick and intense coordination and management by Cumberland County’s administration and staff, along with its financial advisors, allowed the county to take full advantage of favorable conditions right before the recent hike in interest rates.

According to the county’s financial advisor, James Sanderson, with Richmond’s Davenport & Company LLC, Cumberland’s refinancing came at a time when interest rates were trending up due to actions taken by the Federal Reserve to control inflation.

“The county had the foresight to engage Davenport in early March and ultimately to authorize the refinancing,” said Sanderson. “The timing here was critical.”