Bond refinance saves city more than $1.5 million
The city will save $1.57 million in taxpayer dollars by refinancing $14 million in bonds on a day when interest rates for municipal bonds were at all-time lows, Mayor Ben Blake said in a prepared statement.
This initiative is the latest in a series of cost cutting measures taken-up over that past year to make Milford government more cost effective, the mayor said.
In addition to the tax relief that will come from the bond refunding, and more than $900,000 realized by a prior refunding 10 months ago, Blake pointed out that he also pursued savings by renegotiating health care and energy costs.
"I am pleased to announce today the city will be refinancing $14 million in bonds, securing a very favorable 1.53% net interest rate on bonds which were originally financed at an average rate of 3.6%,” Blake said. “The sale will yield a total savings of $1,577,830, or 10.29% of the initial obligation. We were able to take advantage of existing market conditions to seize the opportunity and return $1.57 million to the taxpayers of Milford.”
“Today's announcement is the result of outstanding planning, management and timing and could not have happened without the help of Matthew Spoerndle, director of Phoenix Advisors and Peter Erodici, Milford's director of finance," Blake said.
Blake also cited Milford's outstanding bond rating as a key to this transaction.
"Milford would not be able to secure these rates if we did not maintain excellent bond ratings, Blake said. “The three rating agencies — Moody's, Standard & Poor's and Fitch — recently gave our city high marks for prudent fiscal practices amid the downturn in the real estate market. All three affirmed the city's bond ratings — Aa1 for Moody's, AA+ for S&P and Fitch.”