Aug 14, 2002 By Paul Sunyak 3 min read

The Fayette County commissioners refinanced a 2-year-old bond Tuesday to get a one-time savings of $321,600, with Commissioners Sean M. Cavanagh and Ronald M. Nehls lavishing high praise on RRZ Public Markets Inc. Commission Chairman Vincent A. Vicites, while voting to refinance the $12.7 million bond, said he would have preferred to open the job up to competitive proposals when the task was awarded to RRZ several months ago.

“The bottom line is you should RFP (seek requests for competitive proposals) a $13 million decision,” said Vicites. “The reason for me … is to see what’s out there.”

However, Cavanagh and Nehls said they were extremely comfortable with the job done by RRZ, the firm selected to handle the original bond issuance in 2000. Cavanagh said that once that selection was made, he had no qualms about selecting RRZ for the refinancing, a job that nets the firm an additional $88,821 in fees.

“There’s no need to go through it (the selection process) twice,” said Cavanagh, who noted that the refinancing savings goal of $220,000 to $230,000 was exceeded by $100,000 in Tuesday’s action.

He told RRZ representative Joe Muscatello, “Today we saved the taxpayers of Fayette County $321,600. I think you’ve earned your pay.”

Because the commissioners earlier had authorized RRZ to approach them when market conditions were ripe, Cavanagh said the county was positioned to strike quickly to realize substantial savings.

“If we didn’t have the paperwork done, we couldn’t have struck when we did,” said Cavanagh.

Nehls noted that the refinancing process actually began last October and moved along largely as the result of RRZ’s willingness to stay actively involved in the process. He said RRZ is “a company that I have appreciated … like a good neighbor. They’ve led us by the hand.”

Said Nehls, “Today is the day of fruition, really … we’re doing it now because everything looks so good (in terms of the numbers).” He added that no matter what firm was selected, the refinancing outcome would have been the same.

Muscatello said the refinanced bond will expire in 2028, the same as the original bond, but the main difference is that the new aggregate interest rate of 4.67 percent is substantially lower than the old rate, which fell in the 5.50 percent to 5.60 percent rage.

“This is purely a refinancing,” said Muscatello, noting that neither the length nor the amount of the original bond will be expanded by the move.

Muscatello said the county would see its one-time savings windfall on Nov. 15. Cavanagh noted that the timing is fortuitous, as the commissioners will be piecing together next year’s budget at that time.

Vicites asked several pointed questions about the refinancing before casting his vote, including one on whether it’s possible that interest rates could drop further. Muscatello said that anything’s possible, but he added that if Vicites were able to make such a crystal ball prediction, he should be in the bond issuance business.

Vicites said his preference to RFP the refinancing had no correlation to the job RRZ has done. He said that it’s quite possible that the firm would have been his selection, even if competitive proposals were sought for the bond refinancing.