With interest rates at an all-time low, the city of Ramsey is taking advantage with a refinancing bond issue.
The Ramsey City Council unanimously voted May 8 to sell nearly $16.9 million in general obligation (GO) capital improvement bonds to refinance the municipal center debt and a portion of the park ramp debt.
Councilmembers Randy Backous and David Elvig were absent for the vote.
The 20-year GO bond issue will have an average interest rate of 3 percent.
By refinancing the 2005 municipal center bond, “there will be a significant cost savings to the city,” said City Administrator Kurt Ulrich.
The bonds were sold at a much lower interest rate than expected and will save about $481,000 in net present value cash flow, said Paul Donna of Northland Securities, the city’s financial adviser.
By refinancing, the city will be able to take advantage of the interest rate savings as well as bring “annual debt levy to a more manageable level of $1.1 million versus the current $1.5 million,” Ulrich said.
The city had expected to sell the bonds earlier this year, but the sale was delayed.
The interest rates had risen to an unacceptable rate and it waited until the market was more favorable, said Donna.
Tammy Sakry is at [email protected]