City announces refinancing of City Centre loan
Submitted by Howard B. Owens on July 18, 2014 - 12:07pm
On Wednesday July 16th the City refunded (refinanced) the current City Centre debt service. This effort refinanced approximately $4,050,000 of general obligation bonds that financed the construction of the City Centre in 2004.
These bonds were issued by USDA Rural Development, and at the time were considered low interest at 4 percent. However, much like refinancing your own home mortgage, refinancing the City's outstanding bonds will reduce the interest paid over the life of the loan. The refunding was approved by City Council on April 8, 2013, and the City along with its financial advisors, Municipal Solutions, Inc., have been monitoring bond market rates for over the past year to find the time when market rates would be at their lowest level to maximize the savings to the City's taxpayers.
Interest rates on municipal bonds are very favorable at this time and the savings realized by refunding the outstanding bonds now resulted in more than $73,000 in increased budgetary savings compared to rates that were presented to City Council one year ago. In total, this refunding has saved the City approximately $303,000 in interest payments during the remaining 21-year life of the reissued bond, ending in 2036.