By refinancing bonds from 2006 and 2007, Noblesville officials will save taxpayers $4.5 million.
“The city is, and does frequently, take advantage of lower bonds rates,” Mayor John Ditslear said. “It’s similar to mortgage and homeowners getting lowest rates and interest cost.”
“We’re not extending the life of bonds, just making the payments less,” City attorney Mike Howard said. “It also reduces some annual costs too.”
Howard said the city issued $20 million in bonds in 2007 for the reconstruction of Hazel Dell Road from a narrow two-lane road to a four-lane boulevard from Edenshall Drive north to Ind. 32.
“The bond proceeds were also used to reconstruct the portion of 156st Street immediately west of Hazel Dell, including the bridge over Kirkendall Creek, and a substantial part of the costs of developing of Dillon Park,” he said.
Howard said the bonds are partially paid from the Hazel Dell Economic Area TIF district and from property taxes. He said the semi-annual debt service payments for the bonds are $1.075 million.
By refinancing these bonds, Howard said the city would save $200,000 a year or $3 million for the remaining balance during the next 15 years. He said the refinancing would likely take place by April.
The other bonds to be refinanced include sewage works revenue bonds from 2006 and 2007. Howard said the two bonds were issued for plant improvements as part of the city’s long control plan. Savings on these bonds are expected to be $125,000 to $130,000 a year.
“Because of the existing interest rates and demand for high quality municipal bonds, we can presently refund these bonds and realize approximately $1.5 million in gross savings between and 2028 when the bonds are retired,” Howard said.
Howard said these bonds will be prepared and financial advisors will take a “wait and see” approach to the market.
“There’s enough volatility in the market it’s nice to have everything ready to go,” Greg O’Conner, city councilor, said.