Almost all of the savings will occur next year, City Manager Omar Strohm told City Council this week.
The savings on the outstanding debt would amount to about 2%, according to the chart.
“I don’t mean to be Captain Obvious,” Strohm added. “(But) this is something we absolutely need.”
Payments on the new borrowing will run until 2033 — the same as for the old bonds, according to Strohm.
The city plans to refinance $17 million in debt, so it can save a predicted $379,000 in interest payments, after accounting for additional costs.
The city hopes to refinance three series of bonds, one each from 2015, 2016 and 2017, whose current interest rates range from 1.959% to 4.75%, according to a chart prepared by Concord Public Finance.
The city will probably refinance the old debt through new bonds but could do it through a bank instead, if that would work out better, Strohm said.
The plan is to introduce a borrowing ordinance at council’s Oct. 12 meeting, then adopt the ordinance at its Nov. 8 meeting, Strohm said.
Strohm confirmed that the projected savings is net of the issuance costs for the proposed new debt, when questioned by Councilman Jesse Ickes. The issuance costs are $48,000, according to the chart.
The city initially hoped to include a series of bonds from 2017 in the refinancing, Strohm said. But those aren’t “callable” until next year, so aren’t eligible for refinancing, he said.
Next year, however, when the city is likely to borrow for fresh capital needs, it can include those 2017 bonds, if it would save money, he said. Mirror Staff Writer William Kibler is at 814-949-7038.
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