Homeowners aren’t the only ones looking for lower loan interest rates; so is the city of Jefferson.
During a recent meeting, Jefferson City Council authorized its staff to seek out a better interest rate on a 20-year loan that was received in 1998.
"The resolution will allow us to revisit our bond ordinance and authorizes staff to look at potential cost savings, which basically equates to the refinancing of bonds," said John Ward, Jefferson city manager. "With the falling interest rates, we thought this would be something worth considering."
Bonds basically are loans to governments to finance various projects.
According to city attorney Ronnie Hopkins, the city could not consider refinancing the loan until 10 years after the loan was taken out. The city reached that benchmark on Jan. 15.
The bond concerning the City Council is a nearly $7 million water and sewer revenue bond on which nearly $4 million still is owed.
The original bond was used to pay off old debts and to renovate and expand portions of the city’s water and sewer systems.
If city staff is successful in obtaining a lower interest rate for the original bond, the city would then refinance the original loan.
"Refinancing the bond is a long process, but we have already started looking for lower interest rates. So far with one of the quotes that we’ve obtained, we are looking at around a $900,000 cost savings, so this is definitely worth looking at," said Amie Vaughan, city finance director.
"The original bond was scheduled to be paid off in 2018, if we refinance we would still be paying the new bond off in that same time frame."