Spokane Valley has refinanced about $7 million worth of bonds issued in 2003 to take advantage of lower interest rates, which the city says will reduce overall debt service by more than $1.5 million over the next 20 years.
Contributing to the savings was the Valley’s recent credit rating upgrade by Moody’s Investor Services, officials said.
“We know our residents are concerned about the economy and we felt these cost reduction efforts were important,” said City Manager Mike Jackson. “The city chose to enter the bond market now so that savings could be achieved while interest rates are still near generational lows.”
The 2003 bond issue raised $9.43 million for two primary projects.
Most of the borrowed money, about $7 million, was used to pay for construction of the CenterPlace regional meeting center and is being repaid by the Spokane Public Facilities District. About $5.65 million is still owing on that portion of the bond issue and the refinancing will save $1.38 million.
About $2.43 million of the original bond issue was dedicated to street and transportation improvements in the Valley and is being repaid by the city’s share of real estate excise tax revenue. About $1.39 million is still owing and the refinancing will save the city about $201,000.
The city said average interest rate for the refinanced bonds is 2.7 percent compared to 4.96 percent on the old debt. The refinancing occurred on Aug. 13. D.A. Davidson & Co. of Seattle acted as bond underwriter and Piper Jaffray, also of Seattle, acted as financial advisor for the refunding bonds.