At the Tuesday, July 7, Lancaster County Commissioners’ Work Session, County Administrator Charles Douts proposed the first steps toward terminating a variable interest rate agreement for the County’s existing debt service. The current agreement was established in 2001 with Bear Stearns Financial Products, Inc. As has been experienced by other local organizations, such agreements were profitable upon inception, but have grown increasingly burdensome in today’s economic climate.
If Douts’ resolution is passed at tomorrow’s public Commissioners’ Meeting, the County will be authorizing a financial adviser to assess the necessary steps. The final termination “will come as an ordinance later,” Douts told NewsLanc. When asked how long it will take for the ordinance to reach the point of authorization, Douts replied that it would be “much shorter” than a few months.
Commissioner Craig Lehman, who has previously served as a Harrisburg budget analyst, expressed support for the measure: “My understanding is that there will be some budgetary savings….And also provide a greater degree of predictability in terms of how we budget our debt service….”
In recent months, both the School District of Lancaster and the City Council have had to address their own budgetary problems stemming from past agreements that have proven insufficient in an unreliable economy. In April, the City Council approved a similar bond rate termination, cutting their long-term comparative losses by $600,000.