New Animal Services Facility Project to Cost Taxpayers Less Than Expected
Author: Auditor-Controller-Treasurer-Tax Collector-Public Administrator
2/25/2020 3:44:38 PM
The County financed the construction of the new Animal Services Facility at a very favorable interest rates, resulting in low costs to taxpayers over the 25-year repayment term for the project.
The County of San Luis Obispo just issued $16 million in bonds to finance the construction of the new Animal Services Facility at a very favorable interest rates, resulting in low costs to taxpayers over the 25-year repayment term for the project.
Based on market estimates leading into pricing, the County anticipated having to pay back the bonds with an annual payment of $1.075 million (at a 2.87 percent interest rate), but helped by the recent high AA+ bond rating affirmed by S&P Global Ratings and a low interest rate environment on the day of sale, the annual payment will be $1.031 million (at a 2.51 percent interest rate).
"This is good news for the people we serve, as we were able to obtain interest rates at historic lows for the financing of a new regional Animal Services Facility,” said County Auditor-Controller-Treasurer-Tax Collector Jim Hamilton, CPA. “Favorable market conditions combined with the County’s strong credit rating contributed to the successful bond sale. In their rating report S&P cited the County’s conservative fiscal policies, strong budgetary performance and our healthy local economy in issuing its highest rating for the bonds.”
S&P Global Ratings confirmed the County’s creditworthiness on Tuesday, Feb. 12 by affirming the County’s Pension Obligation Bonds rating at AAA and Lease Revenue Bonds rating at AA+ with a stable outlook, the highest possible bond ratings in each category.
The project, which will replace the existing outdated 43-year old public animal shelter that has deteriorated beyond repair, will cost an estimated $20.3 million, of which $1.3 million will come from County equity, and $19 million will be financed through the proceeds of the $16 million bonds issued this month. The County will be directly responsible for the debt payments on the Animal Services Facility, but all seven incorporated cities will help by reimbursing the County for approximately 62 percent of the total debt costs, based on an agreement between the cities and the County. The County’s high credit rating benefits all residents in SLO County.
For more information, visit www.slocounty.ca.gov/ACTTC.