Release Date: December 3, 2010
Susan Simmons , Director of Finance, (843)341-4645
Stephen G. Riley, C.M. , Town Manager, (843)341-4701
The Town of Hilton Head Island is pleased to announce today that the Town last week successfully refinanced $13.74 million of Storm Water Utility Debt originally issued in 2002; resulting in a savings over the remaining 16 year life of the bonds of $2.87 million. The Town's savings equate to an average $175,000 annually in debt service payments.
"We went into the market hoping to reduce the interest rate from 4.85% to something closer to 3.3%, based on current market conditions," stated Town Manager Steve Riley. "But Wells Fargo Bank submitted a winning bid of 2.78%! Our strong bond rating, we are the only Moody's AAA rated municipality in the State, certainly paid dividends for us."
Town Finance Director Susan Simmons noted that there were other benefits to the refinancing. "In 2002, the Storm Water Utility was brand new and there was a great deal of uncertainty in the bond market surrounding the program and whether revenues would meet projections. Thus, we were required to maintain a cash reserve of $1.25 million and agree to other provisions that added to the cost of servicing this debt. But we have proved ourselves to the bond market and were able to eliminate the reserve account and free up those funds for repair and improvement projects."
"This is great news that will enable us to hold the line on the rates charged to property owners," declared Mayor Tom Peeples. "Reducing borrowing costs by 43% over the remaining life of the bonds is a fantastic achievement that is a credit to the financial policies adhered to over the years by Town Council."
For additional information, please contact Susan Simmons, Town Finance Director, at (843) 341-4645 or Steve Riley, Town Manager at (843) 341-4701.