Bayou parishes refinance; save locals more than $2M

The Terrebonne Consolidated and Lafourche Parish Governments have been commended by state treasurer John Kennedy for saving local taxpayers more than $2 million by refinancing existing bonds.

Calling it record savings, Kennedy said $614 in taxes for projects in 14 parishes around the state have accounted for more than $12 million in statewide savings.

In Lafourche Parish, the refinancing of $6.2 million in water revenue refunding bonds for Water District No. 1 has resulted in about $393,117 in taxpayer savings, and in Terrebonne Parish, the refinancing of $3.8 million in Public Library Sales Tax Refunding Bonds, $11.3 million in Public Improvement Sales Tax Refunding Bonds and $12.5 million in General

Obligation Refunding Bonds has resulted in about $2 in taxpayer savings.

The Louisiana State Bond Commission meets monthly to review and approve applications from parishes, municipalities, special taxing districts and other political subdivisions of the state requesting authority to incur dept.

By refinancing existing bonds, government agencies reorganize their debt obligations by restructuring its interest rates, resulting in a net positive for the agency.

“The more we save, the more we can put back into the system so we can reinvest back into the system whether it be through maintenance and operation or future capital projects without having to take money from somewhere else. It just frees up more money is what it does,” said Water District No. 1 General Manager Dirk Barrios.

Lafourche participated in a 20-year bond water revenue bond that was able to be refinanced after 10 years.

“So when you sell them originally, in the first 10 year span when it gets close to it, you have the opportunity to call them and then re sell them at a lower rate to save money,” Barrios explained. “You have to meet certain criteria, but basically it has to be where the bond seller, which would be us, is going to save enough money to make it worth our while.”

The main job of Water District No. 1 is to provide potable drinking water to the customers of Lafourche Parish – outside the city limits of Thibodaux, which has its own water system – but it has also worked on water-line projects, water tanks, booster stations, storage tanks and plants.

In Terrebonne Parish, $3.8 million in Public Library Sales Tax Refunding Bonds has resulted in saving taxpayers $216,098, $11.3 million in Public Improvement Sales Tax Refunding Bonds has resulted in saving taxpayers $894,985.28 and $13.5 million in General Obligation Refunding Bonds has resulted in saving taxpayers $894,764.70.

“We’re just trying to save money for the taxpayers,” said Terrebonne Parish Chief Financial Officer Jamie Elfert.

The CFO said this process allows the parish to stretch out tax collections for a large project with an expected life of several decades.

“It’s not just today’s taxpayers that are going to be utilizing that infrastructure,” Elfert explained. “You want to be able to stretch out the collection of taxes over several years whereas future tax payers will also contribute to what they’re utilizing. You don’t want to just say, ‘OK, you taxpayers, we’re going to hit you 100 percent for this major project.’ When you do a bond sale, you’re actually spreading the cost of that major infrastructure over several years.”

The Public Library Sales Tax, a quarter cent tax, is for the construction and improvement of the parish’s libraries.

Public Improvement and General Obligation go toward the parish’s drainage, sewerage and road paving improvements, however Public Improvement is a set quarter-cent sales tax with the money collected going into a bond-seeking fund where it is held and annual payments are made, and General Obligation is a mill-age that is levied to whatever is necessary to pay the debt. When property values go up, the millage goes down, and visa versa. In 2014, Terrebonne levied .53 mills to pay sewerage bonds, .92 mills to pay drainage bonds and .68 mills to pay road improvement bonds, according to Elfert. E3