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APR 2 1989 <br />ROOK 6 PAGE 719 <br />County Attorney Vitunac introduced County Financial Advisor <br />Art Diamond and asked him to bring us up to date re the activi- <br />ties in the refinancing the County is undertaking. He noted that <br />this is one of the most complicated issues the County has ever <br />done, and it was still hanging in the balance as late as last <br />week. <br />Financial Advisor Diamond explained that about 1I years ago <br />FmHA came out with a program that enabled agencies with <br />outstanding loans to buy them back at a discount. This oppor- <br />tunity was explored by the County at that time, but met with <br />resistance from the FmHA on the local level to the extent that it <br />was not felt it was wise to continue to try to take advantage of <br />it at that time. The County has been trying to get out from <br />under FmHA supervision. The Resolution FmI-IA has installed with <br />regard to the water and wastewater system is restrictive and <br />would hamper the expansion and improvement of the system as the <br />county grows. He continued that the same program was reoffered <br />earlier this year, at which point the County again indicated to <br />FmHA that they wanted to take advantage of the program, but again <br />met with some resistance. Mr. Diamond did not really understand <br />the basis of that resistance. He noted that the County at that <br />point decided to p.tess onwards and what the Board sees today is <br />the culmination of the -efforts of many people, plus staff and <br />consultants, and what they have done is refinance the first 4 <br />loans the County has taken with FmHA. <br />Mr. Diamond advised that there are 4 main advantages to this <br />refinancing. We have replaced the outstanding debt on the four <br />loans, which amounted to about 8.8 million, with a debt of 6.5 <br />million. The annual debt service has stayed the same; however, <br />we have shortened the term from 40 year loans down to 30 year <br />loans, and that represents a significant savings with regard to <br />total debt service. In addition, approximately $839,000 in cash <br />was released up front by this refinancing; and $650,000 of that <br />will go to fund the debt service reserve for the Gifford issue <br />2 <br />