At a special meeting on Wednesday, the Indian Trail Improvement District Board of Supervisors approved a bond refinancing for Unit 18, which covers the Madison Green community in Royal Palm Beach. Advisors told board members that the refinancing would save about $972,000 over the remaining life of the loan.
The bond, which has about $8.7 million remaining, was issued to pay for infrastructure construction in Madison Green.
Attorney and bond counselor Mark Raymond said that the Unit 18 bond issue is susceptible to refinancing, and financial advisor Raymond James Capital Services had explored refinancing at a substantial savings.
Raymond noted that the 2005 bond issue could not be refinanced for 10 years. “Raymond James has explored refinancing and has obtained a commitment from their in-house bank at a substantial savings,” Raymond said.
Betsy Hedden with Raymond James Capital Services said their bank was willing to offer a fixed interest rate of 3.25 percent for the term of the bond, which is through 2031. The current rate is 4.75 percent.
“The term of the bond is the same as it was in the 2005 bond issue, so we’re not extending the debt,” she said. “All we’re doing is taking the outstanding interest rate, which ranges from four and three-quarters down to three and a quarter, which is significant.”
On average, it is a savings of 9.5 percent per year to residents of Unit 18. “All in all, it’s a significant reduction, about $60,000 to $65,000 per year,” she said.
Supervisor Michelle Damone made a motion to approve the resolution as presented. “Savings is what our responsibility as a board is, and I’m sure the taxpayers of Unit 18/Madison Green will be grateful for the savings,” she said.
Raymond explained that the bonds were originally issued in 1999 to finance the construction of the infrastructure of Madison Green and were refinanced in 2005.
“We’ll be using that resolution again in this refinancing,” he said. “What you have tonight is a supplemental resolution to the resolution.”
He said the bond payments will continue to be made through assessments to homeowners.
Supervisor Gary Dunkley said he felt uncomfortable approving the refinancing that evening because the board had only received the information that evening. “I did not have time to sit down and really digest what was in it,” he said. “I thought this would only be a presentation. I did not know we would be voting on it tonight.”
Raymond pointed out that they had explained at their meeting two weeks ago that the transaction needed to be done quickly in order to get the reduced interest rate. He said that May 15 was the last day of the commitment.
Damone’s motion carried 4-1, with Dunkley opposed.
