Lower interest rates have given Columbus leaders an opportunity to improve the city’s financial position.
The city of Columbus will be moving ahead with a proposal to refinance up to $9.75 million in bonds that were used back in 2007 to build the Jackson Street parking garage. The plan is to save hundreds of thousands of dollars in interest by refinancing those bonds with today’s lower interest rates. Mayor Jim Lienhoop said he asked the city’s financial advisers to look at all of the city’s debts to see if there are savings to be found. They determined that this refinancing plan is a good opportunity.
Anneliese Williams, with Barnes & Thornburg, appeared before the Columbus Redevelopment Commission Monday night to discuss the resolution to refinance the two bonds. The resolution would allow up to $9.75 million to be refinanced, though Williams says the actual figure should be closer to $8.9 million. She explains that they purposely made the figures higher to give them a “cushion” that would allow them the ability to work on the plan without having to constantly adjust figures as interest rates fluctuate. Under the plan, the city would see a net saving of approximately $684,000, based on current interest rates.
Representatives from the city’s financial advisers, Reedy Financial, as well as legal advisers, Barnes and Thornburg, would be paid out of the proceeds from the bond sales. The amount that the groups are paid will depend on a number of variables. During Monday night’s meeting, Andrew Lanan, with Reedy Financial, explained that his fee is tied to the amount of work he’ll have to do. He also noted that there are differences between a public offering and private placement for the bonds, which affects what he and his company are paid. Regardless, the city’s savings are expected to be substantial. However, Reedy Financial, Barnes & Thornburg and city officials stress that this plan is time-sensitive. There is concern that savings could diminish if the city takes too long to approve the plan. If approved Tuesday night by city council, officials expect the refinancing to be finished by late-March.
The Redevelopment Commission approved the resolution with no objections. The city council is expected to give it’s approval during its meeting Tuesday night. That meeting begins at 6 p.m. inside of City Hall and you are encouraged to attend.