|
|
|
|
|
|
|
|
Friday, November 5, 2004 12:06 PM CST
City garners savings from refinancing $6.35 million
By HERB MEEKER, Staff Writer
MATTOON -- The city refinanced $6.35 million worth of general obligation bonds Tuesday that will yield $16,000 to $17,000 in savings on debt payments over the next 15 years.
"It's the same as a homeowner refinancing a home mortgage for a better interest rate, but on a larger scale," explained Mattoon City Treasurer Preston Owen.
Speer Financial Inc. of Chicago, which manages the bond issue for the city, recommended the refinancing to gain the maximum savings of $247,000 over the term of the agreement through 2019. The transaction includes $4,235,000 on general obligation bonds for the wastewater treatment facility loan from 1998 and $2,120,000 on general obligation bonds on a 1999 loan for the acquisition and renovation of the former Link Clinic Building for the transfer of Mattoon Police Department.
The total cost on the combined issuance is $119,770, based on estimates released on a sheet distributed during Tuesday's Mattoon City Council meeting. The bond refinancing was approved through a consent agenda that allowed city commissioners to vote on all agenda items in one motion. This form of voting is utilized when commissioners agree there is no need for individual discussion on all agenda items before voting.
Refinancing is a method for municipalities like Mattoon to provide incremental savings in the long run on debt repayments.
"Speer is always looking for ways to save money for the city," Owen said. "They tell us when it is the appropriate time to refinance."
The original interest rates ranged from 4.5 percent to 5.15 percent on the different bonds. Owen said officials have concentrated on the annual savings on debt payments each year, not necessarily the final interest rates on the bond issue.
"Hey, $16,000 a year is $16,000 more per year," Owen said. "It provides a little savings to the city."
This is the first time the bond issues have been refinanced, and Owen predicted it might be the last.
"I doubt we will see interest rates going down," he said.
Contact Herb Meeker at hmeeker@jg-tc.com or 238-6869.
Add your comments
Not already registered?
Then click Here.
Comment policy:
JG-TC.com encourages readers to engage in civil conversation with their neighbors. Comments that are submitted are not posted to the site immediately. They go into a queue to be moderated and may take several hours to be reviewed. Comments posted on Saturday may not be reviewed until Sunday afternoon.
In order to keep the page a set width, long lines (mostly long links) will be chopped. Try putting spaces in your links or consider using tinyurl.com to make a smaller link that you can include.
We will never edit or alter your comments, but we do reserve the right to remove comments that violate our code of conduct.
No comment may contain:
* Potentially libelous statements; such as accusing somebody of a crime, defamation of character, or statements that can harm somebody's reputation.
* Obscene, explicit, or racist language.
* Personal attacks, insults, threats, harassment or inciting violence.
* Commercial product promotions.
If you have any questions, please contact our moderator.
|
|
|
|
|
|
|
|
|
|
