Several financial groups have approached the commission in recent months about leading the refinancing effort, but commissioners approved Birmingham-based financial firm Sterne-Agee and Leach Group to handle the underwriting process. Commission Chairman Billy Luster said the company got the nod over others because they had the more beneficial program to the county.
“They were willing to do it for less than anyone else, and they have put together a really good program for us,” Luster said. “By doing this refinancing, we will save the county millions of dollars.”
Luster said the savings could be as much as $3 million.
Before commissioners named Sterne-Agee to handle the process, Joe Kimbrell, a former commission chairman, warned the commission to not follow in the footsteps of past elected officials. “You can’t borrow your way out of debt,” Kimbrell said. “If you just try to take money up front to work on roads, you’ll be in the same shape or worse in the future.”
District 1 Commissioner Keith Davis said the county would not receive an up-front sum as a result of the refinance. “We’ve spent hours working on this, trying to find a way to handle the county’s debt situation,” he said. “The best way to do that is by refinancing, which will save the county money as well as make it to where future payments will be manageable. We’re not taking any money up front.”
Davis said debt from a bond issue taken out by former commission members in 2002 is a major concern for current commissioners. If not refinanced, a $1.7 million payment will be due on that debt in 2018. He said the county borrowed $9 at that time and promised to pay back $27.
“That was the worst bond deal in the history of the United States, and it happened in Walker County,” District 4 Commissioner Steven Aderholt said. “We have looked as in-depth as we possibly can at taking care of this situation.”
Luster said the group has worked to get the lowest possible interest rate, which is the next step in the process. He expects the county to get its credit rating soon and added the debt refinancing should take approximately 60 days.
In other action, the commission:
•Reappointed B.J. Thomas to the Curry Water Authority Board.
•Passed a resolution to restrict weight on County Road 77.
•Approved a hazard mitigation grant program to pay for six weather sirens.