The Noblesville Common Council approved the refunding of two bonds with a potential net savings of $2,056,000 at its meeting on March 15. Each of the bonds were issued in 2008.
“We strive to be as efficient and use taxpayers’ dollars as wisely as we can. By utilizing better interest rates we are finding alternative ways to save funds,” Mayor John Ditslear said.
The city issued the Noblesville Redevelopment Authority Lease Rental Bonds in the initial amount of $12,590,000 to construct roads and drainage improvements for the development of SMC. Payments on that bond run through February 1, 2031. By refunding, the city estimates a savings of $1,505,000.
The second bond was issued for $9,025,000 by the Noblesville Building Corporation First Mortgage Bonds to build Fire Station 7 on Olio Road, the office building for the Street Department and other improvements at the street department facilities. The bond runs through July 15, 2028 and refunding to provide an estimated savings of $551,000.
City Attorney Michael Howard said the refinancings are a result of interest rates nationally being at a lower rate than they were during 2008 when the city financed these projects.
“Based on historic low interest rates, the ability to call the bonds within the next several years, and the ability to privately place the bonds with banks which continue to seek tax-exempt bonds, the city can realize substantial savings,” he said. “By refunding bonds, we did not extend the term of any of the payments.”
Howard said refundings have taken place during the past four years. Last year, the city refinanced 10 bonds for an estimated savings of $14,672,701 of taxpayer dollars.
“We have a team that has put together the transactions these savings with the strong support of the mayor and common council,” Howard said. “The financial experts who do these financing keep track of interest rates and when there are significant financial savings to the city. City Securities has acted as our investment counselor for years and informs us when we can realize savings by refinancing.”
Officials plan to have the bonds issued within two to three weeks.
