GROSSE POINTE WOODS — The city is planning to take advantage of a lower interest rate to save money over time by refunding some water and sewer bonds.
By refinancing about $3.5 million in bonds, the city is looking at almost $200,000 in savings throughout the life of the bond repayments, which end in November 2022.
“We’re not talking about extending the debt,” said Robert Bendzinski of Bendzinski & Co., a municipal financial advising firm. “We’re talking about changing the terms of the debt.”
“We’re taking advantage of lower rates today,” said Pat McGow of the law firm Miller Canfield.
The Council discussed the issue at a Committee of the Whole meeting Jan. 14 and voted unanimously on the refunding at the Jan. 29 regular meeting.
The current interest rate is 3.1 to 3.9 percent. The city is looking at a possible new rate of 2 percent.
“That is nice,” Mayor Robert Novitke said of the anticipated interest rate.
“It saves our taxpayers dollars,” he said of the cost savings.
While it is good because it does mean a cost savings on the bonds over time, Council member Vicki Granger wanted to make sure residents realized that it doesn’t give the city savings enough that would result in a lowering of water rates. It comes out to less than $3 per year, per household.
Still, it is still good news to save money.
“We want to make sure it’s as sound as possible,” Granger said of the fund.
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