As interest rates have fallen, Nick Anhut with Ehlers and Associates told the Morris City Council at their regular meeting on Tuesday that it makes sense for the City to refinance four of its bonds that hold a principal amount close to $2 million.
“Remember last year that was a 10-year bond, we paid over a 10-year period,” said Anhut. “We were able to obtain about a 3.35% interest rate, which was actually pretty good at the time. And now we’re looking at rates in the low 2’s in the marketplace. So, I think there is an opportunity here to cut down on some debt service cost.”
The City’s debt service is currently sitting at $179,000. The refinancing would result in a reduction in future payments of over $240,000. After paying down the debt service, this would leave the City with an estimated net savings of around $61,000, which can then be used for other City purposes. The Council approved the refinancing plan.