–by Sylvania Mayor Craig Stough
PUBLICATION DATE: 10.18.19
Sylvania City Council has authorized the city finance department to pursue refinancing $14,940,000 of existing city of Sylvania bonds issued in 2011 and 2008 in order to take advantage of the current lower interest rates. The refinancing is anticipated to reduce interest expenses by an estimated $1,447,580 over the remaining life of the 20 year bonds.
Two electronic sales of bond refinancing will be taking place. Before the end of 2016, $9,755,000 of bonds issued in 2011 will be sold. The original amount of the bond issue was $13,575,000 but has been reduced by the payments made to date. The bonds were issued to finance the new elevated water tank and a number of street improvements around the city. It is estimated the refinancing will save $1,018,453 in interest, or about $68,000 per year.
During the fourth quarter of 2017, a second bond sale to refinance $5,185,000 of bonds issued in 2008 will be pursued. The bonds were issued primarily for street improvements. It is estimated the refinancing will save $429,127 in interest, or about $40,000 per year.
The refinancing will not extend the original 20-year repayment schedule of the bonds, with maturity still to occur in 2031 and 2028. Further, all savings will be used toward street and infrastructure improvements and will not be used for operations. The exact savings will be determined by the interest rates bid at the time of the bond sales.
The city of Sylvania is not selling any new debt this year. The amount of city bonded debt remains below the permitted legal limit and is about average for a city of Sylvania’s size. The use of these long-term bonds has allowed the city to update and expand its infrastructure and to pay for those improvements over the course of their useful life.