The City of Negaunee is announcing two general obligation bonds have been refinanced, saving the City tax payers $826,001.87. Savings occurred with significant reduction on interest rates for both bonds. Both bonds were necessary to pay for improvements to both the water and sewer systems.
Under the 1997 Water Bonds, the City owed $2,064,050.00, with an interest rate of 4.5%. Under the new terms, the City saved $383,466.22, bringing the total owed down to $1,680,583.78, with a new interest rate of 2.00%.
Under the 2002 Sewer Bonds, the City owed $1,333,980.00, with an interest rate of 4.6%. Under the new terms, the City saved $442,535.65, bringing the total owed down to $950,934,35, with a new interest rate of 1.19%.
“The first question everyone asks is, will their utility bill go down. The answer is no, but this is a good day for the tax payers of Negaunee. Not only do we reduce our debt, but this savings can help to stem off price increases”, City Manager Nate Heffron said.
Due to the recent slowdown of the economy, borrowing has become much cheaper and more competitive. The City was able to take advantage of these lower interest rates for significant savings. According to Heffron, “The City will continue to seek out every opportunity it can to save tax payer dollars, through refinancing bonds, obtaining grants, and a number of other tactics.”
Questions concerning this release or attached directive may be directed to the attention of the City Manager, Nate Heffron at (906) 475-7700 ext. 11.