By J.M. Boggs
Like a homeowner refinancing a home to take advantage of lower mortgage rates, the city of Allen Park saw some sizable savings by restricting some debt.
Chief Financial Officer Bob Cady detailed the savings during the May 28 meeting of the City Council.
In all, five bond issues were refinanced with bids opened on May 15.
“I’m happy to report that the total savings on those issues was almost $2.9 million over the life of those bonds,” Cady said, “an average of $229,496 a year.”
Most of the annual savings come through the refinancing of bonds issued to pay for the city’s Brownfield project with an average savings of $117,000 each year.
In all about $16 million of bonds were refinanced.
Cady praised a wide array of town officials, attorneys and advisors for their work to execute the maneuver, as well as US Bank which will handle the financial transactions.
“It was a lot of work by a lot of people,” Cady said. “But you can’t deny the savings. It was beyond what I thought we would do.”
The average life of the bands was 12 years and the city would have paid out just shy of $24 million by the time the debt was paid off. Now, the reduction in interest paid will mean the city pays $21,038,000.
“It came out very well,” said Mayor William Matakas.