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City saves with bond refinance
Oak Harbor taxpayers will save at least $76,300 over the next 10 years thanks to a decision this week to refinance the city’s outstanding water and sewer bonds.
In 2004, the Oak Harbor City Council authorized the sale of $2.86 million in revenue bonds. It paid for the construction of several infrastructure projects, including repairs to the sewer lagoon liner on the Seaplane Base.
Doug Merriman, the city’s finance director, said he reviews the city’s outstanding bonds annually to see if refinancing is warranted. Rates have been on a steady decline and have never looked better, he said.
“We’re at the lowest rates we’ve seen in decades,” Merriman said.
Jumping into action, he proposed the council refinance the $1.67 million balance on the 2004 bonds.
Annette Sommer, a vice president with Seattle Northwest Securities, gave the council a presentation about the bond market and the potential savings Tuesday evening.
According to her report, the present value of the savings in today’s dollars is $76,300, but the total savings after calculating in inflation could be as high as $146,750.
There were a few questions from council members but all were in agreement to proceed. The proposal was approved by unanimous vote.
Merriman said it will take up to three months to complete the refinancing, which means the final rate may change slightly.