Mayor Chris Beutler today said historically low interest rates and the City's high bond ratings are leading to millions of dollars in savings for taxpayers. Since 2011, the City has saved $17.5 million by refinancing bonds. At its meeting Monday, the City Council will consider two more bond issues for savings of an additional $1.7 million.
"Just like families who take advantage of low interest rates and good credit to refinance their homes, the City's policy is to take advantage of low interest rates and our high bond ratings to save significant dollars," said Beutler. "Without cutting services, we are able to save taxpayers millions of dollars and hold the line on utility rates and tax rates."
Beutler said the City has the highest ratings possible from two major national rating agencies. They cite Lincoln's stable and diversified economy and low unemployment rate and City Hall's solid financial performance and moderate debt.
"There is a strong correlation between what we have accomplished as a community and this opportunity to save taxpayer dollars," Beutler said. "Rating agencies give the highest ratings to well managed cities. That results in the City receiving the lowest possible interest rates on its bonds. Our prudent budget management and strong economy have put us in an enviable position as we plan Lincoln's future."
City Finance Director Steve Hubka said the City has refinanced Certificates of Participation (COPS) and many different kinds of bonds, including sanitary sewer, highway allocation, water revenue, parking revenue and solid waste bonds. The total amount of the bonds refinanced since 2011 is $155.3 million.
The bonds on Monday's City Council agenda are $6.3 million in storm sewer bonds and $13.5 million in sanitary sewer revenue bonds. Both were originally issued in 2005.
Hubka said the City refinances debt when existing bonds are "callable" and existing market rates will result in a significant savings over the rates paid on existing bonds.