Bond refinancing saving city of Newton cash
A 2020 survey of city residents drew attention of city staff — about 85 percent of those responding to the survey told the city to refinance and refund bonds to reduce debt and interest payments.
" The community said ... one of their number one priorities was for us to refiance, pay down existing debt and figure out a way to continue to build new projects without incurring additional debt," said Kelly McElroy, city manager for the city of Newton. "Part of that is fortunate, a silver lining of the pandemic."
With interest rates at "historic lows" according to city staff, the city has moved forward with refinancing of bonds to reduce interest payments.
For the fourth time since the pandemic began in 2020, the city of Newton is refinancing a set of bonds — making use of lower interest rates in an attempt to save money on interest costs.
The total cost savings of those actions is about $2.1 million, according to city staff.
Sept 14 the city again did what those survey respondents asked — approving the sale of more than $6.6 million in bonds come October. The bonds being refinanced were taken out in 2013.
The annual savings are estimated to be more than $57,000 for the next five years, and about $35,000 annually for the five years following.
The timeline for repayment of the bonds will not change.
City staff are expected to report the results of the sale process Oct. 12.
"I just love how you can turn over those rocks and save us money," said Mayor Richard Stinnett.