SYRACUSE -- City officials have taken steps to refinance an existing bond on the fire station -- a move expected to save up to $16,000 a year.
The city council and the municipal building authority board voted unanimously Feb. 14, in separate actions, to authorize the issuance and sale of municipal bonds in an amount not to exceed $5.7 million, and to refinance the station.
The municipal building authority board finances the construction of city facilities and then leases them to the city. The board is made up of council members and the mayor.
Approval of the resolution initiates a waiting period before the bond package can be finalized, said Johnathan Ward, vice president of public finance for Zions Bank.
Ward said there is a 30-day notification period, commencing with publication of a notice of bonds to be issued. The bond package could be finalized within 45 days, he said.
The existing fire station will serve as collateral in the municipal bond plan.
Ward estimated the city may be able to get a finance rate of approximately 3.16 percent for the new bond, compared with an interest rate of 4.13 percent for the current bond plan.
In 2008, the city bonded for $5.9 million for a 20-year period to pay for a new firehouse. The city has principal and interest payments of approximately $458,500 a year to pay for the bond, said Stephen Marshall, city finance director.
The city could save on finance charges, even when factoring in closing costs of a new bond plan for the fire station, he said.
Estimates from the Zions Bank finance department suggest that new bonds would have an average coupon of 3.1 to 3.5 percent, depending on where the bond was placed.
Marshall estimates the city could save approximately $206,000 overall during the life of the bond.