Firstenburg refinance to save taxpayers more than $900,000
Friday, December 23, 2011
The city of Vancouver refinanced a bond on the Firstenburg Community Center to save a total of $932,711 in debt service payments on the east side recreation center.
Like homeowners taking advantage of low interest rates, the city is doing the same in refinancing, Vancouver Treasurer Carrie Lewellen said in a news release.
The bonds are Limited Tax General Obligation Refunding bonds, a term given to bonds that are issued by municipalities. The city council can issue general obligation bonds up to 1.5% of the assessed value of the city. The new bond was issued at an overall yield of 3.26 percent, compared with 4.43 percent interest on the bond that was replaced. The bond is set to be paid off on Dec. 1, 2029, which is the same date as the prior bond.
The move comes on the heels that both the Firstenburg and Marshall recreation centers have been losing revenue from monthly pass sales and have contributed to a $1.3 million shortfall that will lead to layoffs in the coming months.
During the past 10 years, the City has refinanced $54.4 million in general obligation bonds (paid from the general fund), which reduced debt payments by over $3.9 million. In total, Vancouver pays about $10 million a year from the general fund for all of its debt, including interest. Refinancing over the years, has lead to the city’s borrowing cost for its long-term general obligation bonds to be about 4.2 percent.