Refinancing bonds will save city nearly $1M
Published 9:41 am Friday, March 13, 2015
The bids are in, and a move to refinance two Elizabethton Electric Department bonds will save the city more than $980,000 over 13 years.
During last month’s meeting, council approved the plan to refinance a 2005 bond for $2.2 million and a bond from 2007 for $9.6 million for lower interest rates. The 2005 bond currently has an interest rate of 4.05 percent, and the 2007 bond has a rate of 4.4 percent.
Under the refinancing plan, the rates would drop to between 2 and 2.5 percent, Mayor Curt Alexander said. This results in a higher than expected savings.
“The market was more competitive and we were able to save more than the $800,000 we had first expected,” Alexander said.
Rick Dulaney of Raymond James told council last month the refinancing move could save $685,000 on the 2007 bond and $115,000 on the 2005 bond without extending the length of the bonds.
Because of the more competitive rates, the city was able to save $876,010 on the 2007, Finance Director Debbie Kessler said. The savings were not as much as expected for the 2005 bond, she said. The final amount came in at $107,125 instead of the projected $115,000.
No other moves were necessary by council to accept the new interest rates, Alexander said. Since the bids came in lower than the current rates, the amounts were accepted and put into place.
Council approved a motion to allow mobile app and integrated voice response payments for EED customers.
The EED is in the process of changing billing providers, and when the switch is made, the new company, Cash Cycle Solutions, offers mobile app and automated phone payment options. The mobile app would allow customers to pay and check their bills in real time on their smartphones or tablets. The mobile app will also enable the electric department to sign customers up for electronic billing.
The IVR portion of the system would allow customers to make payments on the phone without having to come into a payment center.Council deferred decisions on changes to the city’s retirement plan and an contract with a retail recruiter until more discussion can be had on the changes during upcoming budget workshops.
Councilman Richard Tester made the motion to defer a contract with Retail Strategies, that would have cost the city $80,000 over three years for retail recruitment services.
Tester cautioned against obligating the money while the county and city’s economic development plan is still shifting.
“We want to get the most bang for our buck,” he said. “We might be able to get better use for our economic development dollars. This is something that is better discussed in a budget workshop before we make a decision.’
The motion to defer was unanimously approved.
Council also unanimously approved deferring changes to the city’s retirement plan after Alexander requested the change, which was put into a motion by Tester.
“I know it seems like we keep putting this off, but this is a huge decision and I want it to be the right one,” he said.
Council approved several upcoming events include the Carter County Relay for Life, the Carter County Cruise-In, the Spring Break 5k, the Milligan College Bicycle Race and the West Side Elementary Katrina’s Flight Run/Walk.
