City Refinances Utility Bond
April 16, 2013
CEDAR HILLS – On April 16, 2013, the City of Cedar Hills refinanced its 2009 Utility Revenue bonds issued for water system improvements to reduce the interest rate from 5.99% to 3.02%. This will amount to a total savings of approximately $236,000 over the life of the loan with a net present value of savings in the amount of $195,000. The savings realized in the first year will exceed $25,000.
An initial offer made to the City Council in March would have lowered the interest rate for ten years, but at that point the rate would be determined by the market. After the Council expressed concern over the risk of an unknown future rate, a new offer was proposed to provide the lower rate for the life of the loan, which is 16 years. In addition, the city is now allowed to prepay 10% of the remaining principal balance each year with no penalty, which can reduce the life of the bond.
“We are very pleased to have the opportunity to refinance this bond and with the favorable terms,” stated Mayor Gary Gygi. “This opportunity comes from the city maintaining a good credit rating due to the commitment of current and former city council members to adhere to sound fiscal principles throughout the years.”
The terms of the agreement were approved at the April 2, 2013, city council meeting. The City of Cedar Hills always strives to reduce costs, while providing quality service to the community.______________________________________________________Media inquiries may be sent to Jenney Rees at email@example.comFind us on Facebook at www.facebook.com/cedarhillsutah