Columbus is refinancing a bond used to pay for building The Commons, resulting in more than $550,000 in savings.
Randy Ruhl, senior vice president of public finance with Hilliard Lyons, told Columbus City Council members Tuesday that the city still owed $6.255 million in the 2009 bonds, scheduled to be paid off in 2028, out of the original $9 million in general obligation bonds that were issued.
When the bonds were issued, they came with a 4.75 percent interest rate, but the city could save $55,000 a year, or more than $550,000, by refinancing at a 2 percent interest rate, Ruhl said.
The savings from the refinancing could be reallocated for other purposes, Ruhl said.
Mayor Jim Lienhoop said the city is trying to take advantage of low interest rates while it can and to save money in the long run.
Lienhoop said the savings realized through refinancing wouldn’t be earmarked for any designated purpose and would be extra money that would be placed back into the city’s general fund.
However, the money could go toward road improvements in Columbus, Lienhoop said.
“We continue to have a need for asphalt overlay throughout the city, so that might be a good use for it,” Lienhoop said.
The bonds are one of four the city currently has, said Jamie Brinegar, city finance director. The city plans to pay off one of its bonds for the Columbus parks issued in 2005 by the end of December or in January, Brinegar said.
The council will consider the refinancing of the 2009 bonds on second reading at its next meeting Aug. 15.