Firstenburg refinancing to save Vancouver $933k
Saturday, December 24, 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 issued by municipalities. The city council can issue general obligation bonds up to 1.5 percent 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 of news that both the Firstenburg and Marshall recreation centers have been losing revenue from monthly pass sales, contributing 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 more than $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 put the city’s borrowing cost for its long-term general obligation bonds at about 4.2 percent.