The refinancing was for bonds originally sold in 1999 to build the Summit View Youth Correctional Center in Las Vegas which houses high-risk juvenile offenders.
“Today’s sale is essentially refinancing the mortgage on this project at a lower interest rate, which will result in a savings to the general fund of more than $850,000 over the
2010-2011 biennium at a time when state government is looking for every dollar possible,” Marshall said.
“In our opinion, it was a wise financial move to conduct this sale during the present economic conditions facing the state, with the net result being upfront savings that will help fill present budget gaps,” she added.
Marshall’s office also recently completed the successful sale of five series of general obligation bonds totaling $130.9 million.
The average interest rate was 3.69 percent, one of the lowest interest rates the state has received and significantly lower than the 4.3 percent sale of similar bonds in July 2008. The lower rate means lower borrowing costs to the state. The sale was managed by Barclays Capital and Merrill Lynch.
Of that total, $68 million were Build America Bonds, which will result in a savings to the state of approximately $4.6 million over the term of the bonds as compared to tax-exempt financing. As part of the Build American Bonds program, the state receives a 35 percent interest subsidy from the federal government.
“So if people say to you, what is the stimulus doing for me today, today it saved you $4.6 million on the life of these programs,” Marshall said. “People need to realize these things.”
The money will be used to stimulate Nevada’s economy and create jobs. Of the $130.9 million total, $75 million will be spent on capital improvement projects. Another $3 million will be spent on the state Cultural Affairs Grant Program. There is also $13 million for Lake Tahoe improvement projects and $13 million for state park and wildlife projects. The remainder was another refinancing at a lower interest rate.
Evan Dale, deputy manager over fiscal for the state Public Works Board, said some of the 54 projects receiving funds from the bond sale include a medical education learning lab at the University of Nevada, Reno totaling $20 million; a new readiness center in Southern Nevada, $1.3 million; exhibits for the Las Vegas Springs Preserve Museum, $5 million; and the Southern Nevada Veterans Cemetery in Boulder City, $780,000.
The projects are designed and constructed by private companies generating jobs for Nevada residents, he said.
“Construction and infrastructure are pretty good stimulus expenditures,” Dale said.
The projects were all authorized by the Legislature.
Marshall said another reason for the low interest rate in the bond sale was because the state has been able to successfully maintain its strong credit rating.
Following a review of the state’s financial stability by the three rating agencies last month, Nevada maintained its high AA credit rating, she said.
