Sussex County adopts ordinance expected to create $2.3 million in savings for county taxpayers
NEWTON, NJ (Sussex County) – In a time when many New Jersey residents have felt crushed by the weight of overburdening Murphy Administration taxes, Sussex County’s Board of Chosen Freeholders have provided relief to county taxpayers through Refunding Bonds, expected to garner more than $2.3 million in tax savings.
The measure for the refunding bonds was unanimously adopted last week to replace inherited debt in Lease Revenue Bonds as part of the “Guaranteed Renewable Energy Program,” approved by the 2011 Freeholder Board, none of the present freeholders having served on that board.
Those $26,715,000 in Lease Revenue Bonds backed a solar energy program that went belly-up after the company folded, leaving Sussex County residents holding the bag.
According to the ordinance, $11,070,000 remains outstanding from the 2011 bonds, which will be refunded and refinanced, “to achieve debt service savings and tax relief.”
After Freeholder Director Sylvia Petillo read the ordinance into the record, Bond Attorney John Cantalupo provided background about the initial bonds; and expected savings through the Refunding Bonds.
“This was the original solar program, that I know you are all aware of, is those bonds were originally financed,” Cantalupo said. “And as you know, we are in an historically-low interest rate environment.”
Cantalupo compared the bond refinancing process as a way to lower payments, much like a home mortgage, further recapping the Freeholders approved a resolution on Oct. 15, directing the Morris County Improvement Authority, the issuer of the bonds – with Sussex County not having its own Improvement Authority – to activate the process. Once underway, it triggered the working groups within the Improvement Authority and county, to start reviewing the underlying documents and refinancing process.
Cantalupo said when analyzed, it was discovered the 2011 ordinance never included a refinancing mechanism. In order to create that component within the original ordinance, Cantalupo said the 2011 document required amending, “to allow the bonds to be refinanced.”
“You’re not increasing your debt, you’re going to be lowering your debt,” Cantalupo said.
Cantalupo explained more about this savings opportunity for Sussex County residents, saying that to refinance debt in New Jersey, a 3% debt services savings must already exist.
“In this instance, what’s currently on the table based on market from the Monday before when it was looked at [Nov. 30], the savings are over 10%,” Cantalupo said, because the county has already paid a shortfall.
“That equates to $1.15 million saved, which, goes directly to the county and the taxpayers, under that program,” Cantalupo said.
However, Cantalupo said taxpayers will actually save $2,309,000, calling it a “fairly significant opportunity” for Freeholders to approve taxpayer relief and debt services.
Freeholder Deputy Director Dawn Fantasia thanked Cantalupo for his presentation and for the consistent communications with his office on the topic, stating, “As you know, the current Freeholder Board came in and inherited some of these decisions, and some of this debt, and all of our residents have had to carry this burden.”
“The fact that we are able to save over $2 million, by amending this, is definitely excellent news for us as a board and us as a county,” Fantasia said.