Lancaster County commissioners say a plan to refinance $18 million worth of debt remaining from a 2002 bond issuance will further improve its outlook with rating agencies, as the county looks ahead at building a new jail.
On Wednesday, the board of commissioners approved a plan to restructure the debt by issuing a new bond with a fixed interest rate no higher than 6%.
The new bond would still be paid off in 2030, as previously structured.
The commissioners’ approval Wednesday gives financial representatives certain parameters for the sale in the bond markets, such as the 6% maximum interest rate. Commissioners said they will need to authorize the sale before it can be completed.
The 2002 bond was itself a restructuring of a bond the county issued in 2000 for $25 million. In the late 1990s and early 2000s, the county approved seven bond issues to pay for various capital projects, including a new 911 communication system, the Youth Intervention Center and the Public Safety Training Center in East Hempfield Township.
County officials at the time said the $25 million bond from 2000 would be used for farm preservation, but the ordinances approving the bonds had broad language that allowed the county to use it for other things, according to newspaper archives.
Of the original $25 million bond just $7.7 million went to farm preservation, $6.3 million was used for 911 system improvements, $6.7 million went to the Youth Intervention Center project and $1.5 million was used for improvements to Lancaster County Courthouse.
The county’s debt levels peaked in 2012, when it was carrying $271 million in bond debt.
The county’s latest comprehensive annual financial report showed total obligations of $198 million, all of it due to be paid by 2044.
The lower debt level helped raise the county’s credit rating with the influential Moody’s Investors Service three times over the last decade. The bond rating agency last raised the county’s credit rating to Aa3, its fourth-highest of 18 potential rating, in 2020.
A preliminary estimate of the cost to build a replacement for Lancaster County Prison came to $163 million. The county estimates the project will begin construction next year and open in 2026.
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