In 2006, the City issued $6,900,000 in City Parks Bonds. At the beginning of June of this year, $5,175,000 in the bonds, with an average interest rate of 4.4%, were outstanding and payable through 2026, leaving the City’s total liability at $6,882,750.
The current municipal bond market allowed the City to realize a savings in refinancing the bonds. The new bonds carry an average interest rate of 2.84% over 15 years leaving a liability of $6,487,028. The City will save a total in net present value of $387,457 over the life of the bonds.
On November 9th, Standard & Poor’s re-affirmed the City’s High Quality AA- rating emphasizing the City’s maintenance of very strong, albeit, declining available balances; good financial policies and practices, including recently adopted financial forecasting model and a minimum reserve policy; and a low debt burden with no plans to issue additional debt. The High Quality AA- rating benefits the City by increasing the marketability of existing bonds and by receiving lower interest rates on future debt issuances.
For more information about the refinanced bonds, please contact Finance & Information Services Director, Catherine Huber Nickerson at 360-342-5025.