BAY COUNTY, Fla. (WMBB) — Rising interest rates are giving everyone, including Bay County commissioners, a reason to pause before making big financial decisions.
Bay County Commissioner Doug Moore said the market is so unpredictable that the interest rate on a recent loan offer was fluctuating the day the proposal was presented to them.
“We’re entering an environment right now where they’ve raised interest rates several times over the last two months,” Moore said.
Moore is a member of the county debt committee. On Tuesday, they opted for a fixed rate loan which was 0.07% higher than a variable rate option.
But the cheapest rate could not be locked in until August. With pundits predicting another rate hike at the Federal Reserve meeting next week, the committee went with what it thinks is best.
“If we can’t lock it in then and we meet now, and we expect next week there will be a jump in interest rates, even if it’s only ‘a quarter of a percent, their rate is more than likely going to be higher than what the other bank gave us, which is fixed,’ Moore said.
Moore pointed to another recent County transaction. When the county borrowed $100 million for Hurricane Michael recovery, they opted for a fixed loan.
At the time, it looked like it would cost the county money. But because the rates went up, it turned into a huge saving.
“The difference between the fixed rate at the time we locked it in was going to cost the county what it looked like $90,000,” Moore said. With the current rise in interest rates, it appears we have saved the county and community members approximately $1.2 million.
Moore said that for him, rates are a priority and the commissioners are doing everything they can to save taxpayers’ money.
Moore also said interest rates can indirectly impact whether or not they should raise taxes for things like mileage.