Carbon County officials are expecting to save around $600,000 in the county's debt payments over the next 17 years.

During the county commissioners' meeting on Thursday, the board voted on four motions that outlined the refinancing of four bonds, totaling $7,375,445. The county last refinanced the bonds in 2008, when it needed to free up funds for the new judge's chambers in the courthouse.

Commissioner William O'Gurek, chairman, explained that the bonds include a 2002 bond that has an outstanding balance of $1,945,000 and a 4.2 percent interest rate; a 2004 bond that totals $1,300,000 with a 3.8 percent interest rate; a 2008 note that is $1,993,000 with a 6.48 percent interest rate; and another 2008 note that is $2,137,445 with a 4.45 percent interest rate.

"We anticipate and are hopeful that we'll be able to get a rating of somewhere near 3.5 percent or lower," O'Gurek said of the county's action to refinance its debt. "Our consultants (the Susquehanna Group Advisors) have notified us that we can expect to save in excess of $600,000 by taking this action. The timing is right. We are told the treasury rates are the lowest they have been in the last 60 years."

O'Gurek added that the length of the refinanced bond will not change. All bonds were scheduled to run through 2028 and the refinancing will follow the same schedule.

Commissioner Wayne Nothstein explained that the bonds each represent various projects that the county has completed over the years. One was for the construction of the 911 Communications Center in Nesquehoning. Others were for roofing projects, Weatherwood, and a reassessment.

O'Gurek also explained that the way the county will save significantly will include leveling off its debt payments.

"We could have taken a $50,000 savings a year over the next 17 years and generate $850,000 out of it, but what we're going to do is level off our debt payments," he said, noting that the current payment schedule in 2012, 2013, 2014, and 2015 is $1.3 million. After that, the payments would drop to $800,000.

With the refinancing, the county will look at paying between $800,000 and $900,000 annually to save around $400,000 each year for the next four years.

Robert Crampsie, county controller, gave the example of a mortgage payment to illustrate what the county is doing to level off its payments.

In a mortgage payment, the buyer has a set figure that they are responsible for paying monthly. In the beginning of a mortgage, a larger portion of the monthly payment goes toward covering the interest that is owed and a smaller portion goes toward the principal of the home. Over time, the interest becomes less and more of the payment goes toward the principal.

"Jeff Weiss (of Susquehanna Group Advisors) thought the best process would be to generate the savings in the next four years through leveling off our payments and not having to pay the $1.3 million," O'Gurek said. "Leveling off will put us in a better financial position in the next four years, especially given the fact that in the next three or four years we're in for very, very tough times budget-wise.

"We're going to get a payment plan so it is consistent and we pay the same number," he added. "Our charge is to make sure we have enough money in the debt service fund to make that payment."

O'Gurek then noted that the debt service fund is funded through a percentage of the county's taxes that are collected annually.

In related financial matters, the county transferred $4 million into its Weatherwood fund, to repay the $4 million it transferred out of it last year.

O'Gurek explained that of last year's transfer $2.5 million went to the county's general fund, while the remaining $1.5 million went to the debt service fund to make sure the county had enough in those funds to cover all expenses.

"When we adopted the budget for this year, we transferred the money because we were short $2.5 million, which is a serious concern," O'Gurek said, adding that at the time, the debt service payment was expected to spike to $1.3 million. "Susquehanna Group Advisors recommended we transfer $1.5 million from the Weatherwood Fund into the debt service fund to make sure we didn't have to increase the debt service millage for the years that it would spike."

He noted that things have changed now as a result of the county's decision to refinance its debt.

"Had we not sold the nursing home, we wouldn't have had the $4 million to put in, so right there we would have been $4 million short. Let alone that if we still owned it (Weatherwood), we were losing $3 million a year," O'Gurek said. "Can you see the financial difficulty we would have been had we not made that decision? That is $7 million alone right there, not counting the future. That was part of the wisdom in making that difficult decision."