County likely to pay 5% interest on bonds $60 million worth to be offered for sale

November 03, 1993|By Kerry O'Rourke | Kerry O'Rourke,Staff Writer

Carroll County is likely to pay a low interest rate on general-obligation bonds that will be used to finance almost $12 million in capital projects next year, the county's bond counsel said yesterday.

"This year the rates are extremely favorable," said Jay Gede of Piper & Marbury.

Interest rates change daily, but the county probably will pay a rate of about 5 percent, he said.

Last year, interest rates on county bonds ranged from 5.5 percent to 6.25 percent, Mr. Gede said.

Carroll Commissioners Donald I. Dell and Elmer C. Lippy voted yesterday to offer for sale about $60 million in general-obligation bonds for use in fiscal 1995, which will begin July 1.

Of that total, about $49 million will be county bonds reissued at a lower interest rate.

The county plans to refinance bonds that date back to 1986 to take advantage of lower rates, Mr. Gede said. The refinancing will save the county $1.5 million in interest over the next three years, he said.

Seven years ago, the county paid 6 percent to 8 percent on its bonds, county financial analyst David Llewellyn said.

Of the $60 million in bond proceeds, the county would spend about $12 million on a variety of capital projects and use $363,000 for loans to volunteer fire departments, Mr. Gede said.

Of the $12 million, the county would spend the largest single chunk -- $5 million -- on a new middle school in New Windsor.

Officials would divide the rest of the bond money as follows:

* $2.4 million to buy land for future county expansion of the county airport runway and for building new tennis courts at Francis Scott Key High.

* $2.2 million for road improvements.

* $1.6 million for additions and renovations to Mechanicsville Elementary School.

* $407,000 for recreation projects, including the new Sykesville Park.

* $247,000 for additional work at Runnymeade Elementary School.

County officials will advertise for bids from underwriters to sell the bonds. Sealed bids will be opened Nov. 16 at the Baltimore office of Alex. Brown and Sons Inc., Mr. Gede said.

The commissioners may accept a bid or reject all bids, depending on interest rates, he said.

Next week, officials will hear from two New York bond-rating houses about whether the county's bond rating has changed since last year, Mr. Llewellyn said.

County officials met Monday and yesterday in New York City with representatives of Moody's and Standard & Poor's to talk about Carroll's financial health.

The county has an Aa rating from Moody's and an AA- rating from Standard & Poor's. The ratings mean Carroll's bonds are of high quality and therefore carry lower interest rates.

Commissioner Julia W. Gouge, Budget Director Steven D. Powell, Comptroller Eugene C. Curfman and Administrative Assistant Robert A. "Max" Bair attended the New York meetings.

A. Samuel Ketterman of Alex. Brown and William L. Henn of Piper & and Marbury also were there.

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