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Independence, MO —
The city of Independence continues to reap the benefits of low interest rates.
Just as the city found good interest rates in August when it approved debt issues for sanitary sewer system improvements, the same is happening now for the refinancing of debt issued for three prominent projects.
The City Council approved an emergency ordinance to borrow $84.96 million for the refunding of debt issued for the Independence Events Center construction (funded through the Events Center community improvement district sales tax), the Centerpoint TIF and the Eastland TIF. The interest rates range from 3.41 percent to 4.42 percent.
This equates to a total savings of $18.3 million for the city, said Jim Harlow, the city’s director of finance and administration. That breaks down into annual savings of $611,000 for the Events Center project, $122,000 for the Centerpoint TIF and $40,000 for the Eastland TIF.
“It’s a tremendous amount of savings,” Harlow said, “and it’s solely because interest rates are so low at the present time.”
City Manager Robert Heacock said the project costs and funds aren’t associated with the city’s general fund budget, which includes the public safety departments and operations of the city. Opportunities like this one, he said, will help the city pay off the projects sooner than anticipated.
“This is very good news for the city,” Heacock said. “I want to commend Mr. Harlow and other staff involved with seeking out these opportunities. This really is a positive move for the city.”
Most of the savings is associated with the Events Center, Heacock said. Initially, the city had planned to issue just a few bonds for the construction of the Events Center, which opened in November 2009.
Because of the markets “being turbulent at the time that the project, after it was approved and was in process,” Heacock said, “we sought out opportunities to break that down into smaller bond issuance with the idea that hopefully, in the future, we could come back and refinance that and save some funds at a later point and time.”
Harlow also said the savings is significant for the Events Center CID since its board of directors, which includes Harlow, had voted in mid-2011 to raise the CID tax from 0.5 percent to 0.75 percent to make future debt payments due for the Events Center’s construction. That increase took effect on July 1.
“This kind of savings will give us an opportunity to re-evaluate that and possibly not adjust it any higher in the future, but we’ll take that analysis and look at it and maybe lower it sooner,” Harlow said.
Looking ahead, Harlow said, the city is looking toward additional financing for the Power & Light Department, including a refunding of some of the department’s debt, “if interest rates stay so low.”
“It’s the same objective of saving money for the city,” Harlow said. “It certainly is a pleasure to come and say you can save $18.3 million.”
The city of Independence continues to reap the benefits of low interest rates.
Just as the city found good interest rates in August when it approved debt issues for sanitary sewer system improvements, the same is happening now for the refinancing of debt issued for three prominent projects.
The City Council approved an emergency ordinance to borrow $84.96 million for the refunding of debt issued for the Independence Events Center construction (funded through the Events Center community improvement district sales tax), the Centerpoint TIF and the Eastland TIF. The interest rates range from 3.41 percent to 4.42 percent.
This equates to a total savings of $18.3 million for the city, said Jim Harlow, the city’s director of finance and administration. That breaks down into annual savings of $611,000 for the Events Center project, $122,000 for the Centerpoint TIF and $40,000 for the Eastland TIF.
“It’s a tremendous amount of savings,” Harlow said, “and it’s solely because interest rates are so low at the present time.”
City Manager Robert Heacock said the project costs and funds aren’t associated with the city’s general fund budget, which includes the public safety departments and operations of the city. Opportunities like this one, he said, will help the city pay off the projects sooner than anticipated.
“This is very good news for the city,” Heacock said. “I want to commend Mr. Harlow and other staff involved with seeking out these opportunities. This really is a positive move for the city.”
Most of the savings is associated with the Events Center, Heacock said. Initially, the city had planned to issue just a few bonds for the construction of the Events Center, which opened in November 2009.
Because of the markets “being turbulent at the time that the project, after it was approved and was in process,” Heacock said, “we sought out opportunities to break that down into smaller bond issuance with the idea that hopefully, in the future, we could come back and refinance that and save some funds at a later point and time.”
Harlow also said the savings is significant for the Events Center CID since its board of directors, which includes Harlow, had voted in mid-2011 to raise the CID tax from 0.5 percent to 0.75 percent to make future debt payments due for the Events Center’s construction. That increase took effect on July 1.
“This kind of savings will give us an opportunity to re-evaluate that and possibly not adjust it any higher in the future, but we’ll take that analysis and look at it and maybe lower it sooner,” Harlow said.
Looking ahead, Harlow said, the city is looking toward additional financing for the Power & Light Department, including a refunding of some of the department’s debt, “if interest rates stay so low.”
“It’s the same objective of saving money for the city,” Harlow said. “It certainly is a pleasure to come and say you can save $18.3 million.”
