Blaine will save almost $450,000 by refinancing the remaining debt for construction of Spring Lake Park-Blaine-Mounds View (SBM) Fire Station No. 3, according to the city’s financial consultant Springsted.
The Blaine City Council unanimously approved refinancing $4.9 million of general obligation bonds. According to Blaine Finance Director Joe Huss, the city has been paying off its construction debt through an annual tax levy that was $400,000 in 2013.
The cities of Spring Lake Park and Mounds View are paying their own share of the construction, and the Blaine council’s actions just impact its own contribution.
Huss said the city will not see any savings until five years from now because that is when the call date for the refinancing officially is. The savings would be reflected in the last eight years of the bonds.
By doing this crossover refinancing now, however, the city was able to take advantage of low interest rates. The city received an interest rate of 1.42 percent. The 10 bids were the most Springsted has seen since before 2007, according to Terri Heaton of Springsted.
When the council authorized the bond sale April 4, the amount was going to be $5,075,000 and the estimated savings was $300,000. Heaton said the savings will be closer to $450,000 and the principal amount is being reduced to $4.9 million.
“It’s a very good time to enter the market and sell bonds,” Heaton said.
Eric Hagen is at firstname.lastname@example.org