The Forsyth County Water and Sewer Authority opted not to alter its contract for a series of bonds on Thursday during its third meeting on the subject.
The authority, comprised of the five county commissioners and the water and sewer director, refinanced the Series 2005B bonds in August, selecting U.S. Bank as the financer.
The bond refunding was aimed at taking advantage of lower interest rates.
Recently, the bank approached the county with a discrepancy in how the two entities calculated that interest and sought to amend it in the official document.
The bank uses an “actual 360 [day]” methodology, while the county typically uses 12 30-day months, according to Roger Murray, the county’s bond counsel at a previous authority meeting.
The difference in the two is five days’ interest, or about $11,000, depending on the interest rate, Murray said.
The bank and the county reached “an impasse” in determining who was at fault for the discrepancy in the official bond refunding document, he said.
Not offered enough of an incentive to change the agreement, the authority decided to take no action.
Member Patrick Bell said it wasn’t fair for the users of the county’s water and sewer system to bear the additional interest charges that would be incurred by a contract change.
Jim Boff, who chairs the authority, added that when the panel made its decision, it evaluated financers in part based on the interest cost estimates given.
“We were evaluating on value A, and now that we’ve signed the deal, although it’s not a huge difference in money, you’re telling us the value should have been B,” Boff said. “And the B is in your favor.”
That series of bonds, which totaled about $30 million, was issued “for the purpose of refunding a portion of the Series 1998 bonds and to finance the cost of improvements to the water and sewer system,” said David Gruen, the county’s finance director.