Refinancing makes sense for county

Published 1:08 am Saturday, July 14, 2012

If someone said to you, “If you invest $2,000 to improve your home, we’ll give you $10,000 more to make it even better,” would you do it?

Probably. Even if you had to borrow the money to do it.

That is essentially the situation in which members of Covington County’s governing body find themselves. There is approximately $10 million in funding for road improvements available, but only if the county will agree to invest $2 million of its own money. It’s the same math, percentage-wise, as the homeowner example.

There is no doubt that $12 million in road in bridge work can easily be identified in our county, but the commission would have to borrow its $2 million share. That proposition has been built into two proposals current before the county to restructure its long-term debt.

Commissioners currently are considering refinancing more than $7 million in current debt, and borrowing an additional $2 million for road projects.

They say they need the cash to match state grants for which they are applying through the Alabama Transportation Rehabilitation and Improvement Program (ATRIP). The county has not officially been awarded any monies from the state.

Refinancing the debt at lower interest rates generally makes sense. So does spending $2 million to get $10 million more. If the county doesn’t do this, it could be years – perhaps decades – before the county could tackle road and bridge projects this large.

Even supporters of the measure say it is only a smart move if the county gets the grant money; generally, $2 million won’t take you too far down a road project.

On the surface, the proposals make good, common sense.