Derby Refinances Debt, Saves Cash
by Eugene Driscoll | Mar 5, 2013 10:59 pm
Posted to: Derby
Derby Treasurer Keith McLiverty announced Tuesday (March 5) the city has officially refinanced $2.8 million in debt first issued in 2003.
The refinance brings the city’s interest rate on the debt down from 4.25 percent to 2.2 percent.
That will save the City of Derby $181,000 in the next fiscal year.
The city issued bonds of $6.4 million in 2003 to pay for various road and school improvements. The Derby Board of Aldermen approved refinancing the remaining balance on the bonds in November.
A Webster Bank underwriter sent communication to Derby City Hall pointing to the city’s well-funded pension system as a reason Derby was able to get a 2.2 percent interest rate.
McLiverty said the pension fund is strong because of collaboration between the treasurer’s office, the city’s pension board, the tax board and city Aldermen.
City government is “working collaboratively to meet the City’s long term obligations, and funding it today only saves the taxpayers greater expenses tomorrow,” McLiverty said.
In nearby Hamden, the town is trying to avoid a fiscal crisis because the government has failed to adequately fund its pension obligations.
Derby’s bond rating is AA-, according to Standard & Poors. Moody’s gives the city a Aa3.
“This is the result of continuous fiscal prudence, boards and commissions working collaboratively with a common goal of funding our long term obligations, maintaining a strong rating, and working to find savings in the worst economy in modern history,” McLiverty said.
The city treasurer announced the refinancing at a Derby tax board meeting Tuesday (March 5). See the video at the top of this story for a portion of McLiverty’s remarks.
Tax board chairman Jim Butler the city can use all the savings it can find.
“It’s definitely good,” Butler said.
McLiverty said the solid bond ratings are possible because the city has adequate financial reserves, “pay-as-you-go” capital planning and a low debt ratio.
In addition, Derby residents pay their taxes. Collection rates in the city are consistently in the high 90 percentile range, McLiverty said.
“The taxpayers should be applauded for continuing to pay taxes on time, giving us a collection rate that is consistently in the high 90 percent range, and funding the city’s obligations,” he said.
There were no comments