With a vote of approval on March 18, Buckeye City Council moved to save an estimated $4.5 million worth of interest through refinancing the city's Series 2015 Excise Tax Revenue bonds.
It's typical that bonds can't be refinanced for 10 years, and the Series 2015 bonds, also called the 2015 Obligations, has finally been given its turn. The approval allows the refinancing to go through as long as a savings level of at least 3.00% is met. With current rates estimated to be between 2.86% and 4.00%, the odds of that happening looks good.
"City staff met with the city's bond underwriters to determine if any outstanding bonds issued were eligible to be refunded with the goal to lower our outstanding debt costs," reads city documents. "This year, staff is recommending the Series 2015 Excise Tax Revenue bonds ('2015 Obligations') to be refunded."
The $51.2 million bond was originally acquired by the city at a 5% interest rate for the purpose of the creation and improvement of several water systems and facilities including Global Water Resources, West Maricopa Combine, Valencia Water Company and the Water Utility of Greater Buckeye.
Now that City Council has approved to move forward with the refinancing, as long as the rates are desirable, city staff will work to sell the Series 2025 City Excise Tax Revenue Refunding Obligations around April 7 to refinance the 2015 Obligations. Legal documents are anticipated to be finalized sometime near the first of May.
"After the sale, staff will report back to the City Council the final savings numbers and benefit to the General Fund," read city documents."
Read the full document HERE.
