Burnet County saves $1 million with jail refinance

  • Oakley

Burnet County got an early Christmas gift on Dec. 16 with the refinance of the 2015 jail bond series — a move expected to save the county more than $1 million in interest payments.

“The first five years of the bond issue were uncallable, but after that window was over, we were able to take advantage this year of lower interest rates and that will come out to just over $60,000 per year in interest savings for each of the next 15 years,” County Judge James Oakley said. “This is a merry Christmas for the taxpayers of Burnet County.”

Commissioners approved the issuance of $11,375,000 in general obligation refunding bonds that will come mature at the same date as the original issuance March 1, 2036.

With a fantastic Standard & Poor bond rating of AA, the county was able to get an interest rate of 1.647 percent nearly 2.5 percentage points lower than the original interest rate of 4.098 percent. This will generate a savings in interest of $1,078,727.50. The bonds were underwritten by Royal Bank of Canada’s Capital Markets — one of the largest active underwriters of US municipal bonds.

“I was very pleased with the outcome and appreciate the Commissioners Court, Duane Westerman (of SAMCO Capital Markets), RBC, and Norton, Rose Fulbright (bond counsel) for all their hard work in bringing this to fruition,” said County Auditor Karin Smith upon completion of the refinancing.

The Burnet County Jail houses 587 offenders and is certified as a holding facility for U.S. Immigrations and Customs Enforcement (ICE) and the U.S. Marshall’s office in addition to being certified by the Texas Commission on Jail Standards.

Contracting with other counties and with the federal government usually generates enough funding for Burnet County to cover the cost of housing its own inmates. The federal government pays $64 per day per inmate to house ICE detainees and other federal offenders, while other counties pay $45 per day.

The Burnet County Jail was built in 2007 through a public facilities corporation at a cost of $35.5 million with general obligation bonds; no taxpayer money was used to build the jail facility. Several private companies ran the jail, but when it appeared the facility would be shuttered in 2015, Burnet County stepped in and bought the jail for $14 million through its own certificates of obligation. That price represented just 39 cents on the dollar of the original bond issue cost.