Refunding existing debt for local communities is not new to VRA. Aware that local governments have limited resources and are always in the market for cost-savings, VRA routinely notifies borrowers of opportunities to refund existing VRA debt when there are apparent savings. With declining municipal interest rates, Goochland County chose to pursue an advance refunding of its prior debt with the issuance of taxable refunding bonds.
Plans for the 2020 refunding hit a few bumps but the market stabilized after initial COVID-19 uncertainty allowing the County to move forward. On July 29, Goochland and VRA successfully closed the Goochland Tuckahoe Creek District Series 2020 refunding bonds. The par amount of the 2020 refunding bonds totaled $61,350,000. Municipal refundings are typically measured in net present value savings to allow finance managers to assess the impact of future savings in current dollars. However, the gross annual cash flow savings are also very important in that they add valuable dollars back into local budgets in future years, freeing up valuable resources that are now available to use for other County purposes. VRA’s bond pricing on behalf of Goochland County ultimately generated gross debt service savings of $12,109,160 through fiscal year 2042! When these gross savings were discounted back to the closing date, the refunding generated net present value savings of $8,487,716 (15.22% of refunded par) for Goochland.
This transaction was a big win for Goochland and its residents. The net present value savings amount of $8,487,716 greatly exceeded the County’s projected net present value savings minimum threshold of $6,000,000.
"I am thrilled by the results this refunding was able to achieve for Goochland County and its residents. In keeping with its mission, VRA seeks to provide sustainable financial solutions for borrowers." Stephanie Hamlett, VRA Executive Director
“We are very pleased with the timing and results of the refinancing,” said Barbara Horlacher, Goochland County’s Director of Financial Services. “In partnership with VRA and PFM Financial Advisors, LLC, Goochland County has been able to achieve significant savings which will contribute to the continued success and financial stability of the TCSD.”
Kevin Rotty, Managing Director with PFM Financial Advisors, LLC, added, “Many thanks to the County’s leadership, VRA staff and the whole finance team for their flexibility in fast tracking this transaction to take advantage of extremely favorable but volatile market conditions. The result was an outstanding transaction for the County, and the residents and businesses in the Tuckahoe Creek Service District.”