Butler County is saving more than $6 million by refinancing a $45.6 million bond.

According to the bond sale document, the county would save $6.3 million over the term of the 2004 bond, which ends in 2026.

The interest rate was cut roughly in half from 4.25 percent to 2.3 percent.

County Controller Ben Holland said in an interview that refinancing the borrowing needed to be done due to low interest rates.

“This was a great time for that,” Holland said.

However, he questioned why the county went with a repayment schedule reducing the amount due this year from $3.3 million to $199,346.

Holland said freeing up $3.1 million budgeted for debt service in 2014 is not worth doing since it keeps subsequent payments at the same level they are now.

“You want to see savings over the generations,” he said.

He said lowering payments now only increases debt in the future.

Holland said the only time this method should be used is when there is an urgent demand without the money to fund it.

He used the example of a municipality having to replace a vehicle.

According to Holland, there does not appear to be a pressing need for the $3 million considering the pending sale of the Sunnyview Nursing and Rehabilitation Center.

Chief county clerk Amy Wilson said the money would be placed in a sinking fund because it can only be used for debt.

County commissioners Bill McCarrier and Dale Pinkerton supported the refinancing schedule.

But Commissioner Jim Eckstein agreed with Holland.

During the commissioners meeting Wednesday, Eckstein chided his colleagues for approving a refinancing that does not have level amortization.

“I am deeply disturbed,” he said.

Eckstein claimed his fellow commissioners were putting off debt to give themselves spending money now.

“This newly created slush fund will only fuel McCarrier and Pinkerton’s out-of-control spending,” Eckstein said.

McCarrier rebutted Eckstein, calling the minority commissioner’s comments “rubbish.”

According to McCarrier, the immediate $3 million in savings won’t be misused.

“The other money won’t be used as a slush fund,” he said.

McCarrier said there are numerous uses for the money, including debt reduction and increasing the county pension fund.

Holland, who did not attend the meeting, said there is no imminent need to put more money into the pension fund than the recommended annual contribution.

“The pension fund is doing fine,” he said.

Holland agreed with Eckstein that the county should have auctioned off bond underwriting services rather than do a request for proposals, potentially saving money in fees.

During the meeting, Eckstein repeatedly referenced former Controller Jack McMillin as the source of his information.

McCarrier pointed out refinancing is neither Eckstein’s nor McMillin’s specialty.

“They’re not bond experts,” McCarrier said.