The Washington County Board of Commissioners will conduct a hearing July 9 on refinancing of Housing and Redevelopment Authority (HRA) bonds used to finance the TrailSide Senior Living complex in Forest Lake. The hearing will be conducted during the regular county board meeting at 9 a.m. at the Government Center in Stillwater.
The $7.7 million bonds are backed by the general obligation of Washington County. The proposal is to refinance them with $8.2 million in general obligation tax-exempt bonds.
The type of bonds used, 2010B, were created under the 2009 American Recovery and Reinvestment Act and were called Economic Development Recovery Zone Bonds. The county received an allocation of these bonds and delegated the use of this bond tool to the HRA to finance TrailSide Senior Living. The county also pledged its full faith and credit, which enhanced the ability to achieve a lower rate in the market.
The impact of the recent federal sequester will result in an 8.7 percent reduction in the interest subsidy payment to the HRA from the U.S. Treasury. The county will pursue refunding because the current tax-exempt bond market is very favorable, with an estimated interest rate of 2.5 percent versus the existing interest rate of 5.7 percent, and refunding will eliminate the risk of receiving reduced payments from the treasury. The estimated refinancing savings over the term of the bonds is approximately $500,000.
The TrailSide Senior Living complex, 19850 Forest Road, is fully occupied.