Bunnell Joins County in Big-Debt Refinancing Trend, Saving Large Amounts
FlaglerLive | April 15, 2015
The Bunnell City Commision Monday evening approved a refinancing package with Ameris Bank projected top save the city $600,000 in the life of the debt.
The $2 million tax-exempt bank loan refinances two water and sewer debts, from 1993 and 1997. Those debts had interest rates of 5 percent and 4.7 percent, respectively.
The new 15-year debt consolidates them into one, with an interest rate of 2.7 percent. The refinancing reduces the city’s annual debt service by $8,000 and mature five years earlier than the two previous notes, generating the larger, $600,000 saving to the city, according to City Manager Larry Williams.
The city put up the refinancing proposal in the form of a request for proposals. Nine banks initially showed interest, but just two placed a bid. The bank’s fees were limited to $5,000. The transaction with Ameris Bank was conducted through Ameris Vice President Gary Lubi.
The refinancing is part of a trend among local governments taking advantage of lower interest rates. Palm Coast refinanced some of its loans last year. Flagler County refinanced what remained of the loan for the new courthouse last month.
On March 1, the county commission approved a refinancing package on the $27 million remaining of the $33 million debt on the Justice Center, shaving off about $3 million in interest payments. Weeks earlier, the county had completed a similar refinancing, with similar savings, for the Government Services Building.
“That is more than $6 million in total savings to residents,” Commission Chairman Frank Meeker said in a news release at the time. “This is the kind of hard work our residents expect from local officials and staff, and clearly that’s what they are getting.”
Voters in 2004 approved up to $33 million general obligations bonds to finance the courthouse. These bonds are secured by property tax.