BROOKSVILLE — At a time when every governmental dollar is stretched to the maximum, any savings are almost like a gift.
For years, the city of Brooksville has been carrying utilities bond debt with annual interest rate increases that have cost the municipality thousands of extra dollars.
The Brooksville City Council chose a different path Monday night when it voted to consolidate those bonds and refinance them into a single 15-year loan that will net about $657,000 in savings. The restructuring will also yield additional savings by reducing the amount the city has to contribute to its utilities reserve fund, said City Manager Jennene Norman-Vacha.
"We were lucky to be able to make it happen at a time when interest rates are very low and we could structure a deal that was to our advantage," Norman-Vacha said. "I'm not sure we would have been able to do it six months from now."
Norman-Vacha stressed that while the deal won't result in any "found money" for the city's coffers, it will free up funds that can be directed toward repairs and upgrades to Brooksville's aging utility infrastructure.
Mayor Lara Bradburn said that as is the case with many other municipalities that have been forced to trim expenses during the economic downturn, there has been less money for improvements to Brooksville's water and sewer lines, some of which date back to the late 1920s. She hopes the extra cushion the bond restructuring provides will help get the city back on track.
"It's not a cure-all, but it will definitely help," Bradburn said. "It's not a problem that's going to go away on its own."
The deal with allow the city to consolidate three water and sewer revenue bonds issued in 1999, 2002 and 2008, worth $9.7 million, into a single loan through SunTrust Bank with an annual fixed interest rate of 2.442 percent.
Vice Mayor Kevin Hohn, who suggested during a budget meeting last year that the city take a look at restructuring the bonds, said the interest savings alone will make the effort worth it.
"What we were paying on the debt service was crazy, more than 6 1/2 percent on at least one of the bonds." Hohn said. "Now we're paying a little more than a third that amount. To me, that's a win-win for the taxpayers."
Logan Neill can be reached at [email protected] or (352) 848-1435.