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Refinancing windfall to pay for key projects PDF Print E-mail
Daily News
Wednesday, 07 June 2017 18:38

Nearly $600,000 in interest savings enough to fund purchase of senior center, south breakwater work

    The City of Port Washington will save almost $600,000 — enough to pay for the purchase of the senior center and the placement of armor stone around the south breakwater — thanks to a refinancing approved Tuesday by the Common Council.
    Aldermen authorized the sale of $5.4 million in general obligation notes for the refinancing at a 1.96% interest rate, which over the life of the bonding will save the city $599,000.
    Daily PressThe interest rate is much lower than the 2.25% expected when the council agreed to the refinancing in April, financial consultant Carol Wirth of Wisconsin Public Finance Professionals said.
    The reduced interest rate alone will bring the city $87,000 in additional savings over the life of the bonds, she said.
    The original bond issue in 2006 had an interest rate of 4% to 4.2%, Wirth noted, adding the city has $4.9 million outstanding from that bonding.
    Wirth also noted that Moody’s Investor Service reaffirmed the city’s Aa3 bond rating.
    “This is wonderful news,” Ald. Dave Larson said of the refinancing and the associated savings. “Coming up with $87,000 extra is huge. This is a big win for us.”
    That’s because the savings will pay for the senior center building, which the city purchased for $415,000 earlier this year through a short-term loan from the wastewater utility’s surplus fund.
    That loan will be repaid using the bond proceeds.
    The savings will also cover the $250,000 aldermen recently agreed to pay to have armor stone placed along the lake side of the south breakwater this fall.
    The Army Corps of Engineers recently told the city there is virtually no armor stone left along the south breakwater. Replacing it, the corps said, is critical because the structure provides critical protection for the marina and west slip.
    The city has applied for a $100,000 grant that could offset the cost of the armor stone, but officials won’t know until August if it will receive these funds.
    In addition, Wirth said, the bonding will provide $2,600 to be placed in the debt service budget.
    Although Tuesday’s action by the council locks in the interest rates and associated tax levy over the life of the refinancing, the  loan won’t close until June 27.
    The new bonds will be repaid in 2026.