Bond refinancing will save the Lawrence Water Utility $2.5 million

November 15, 2017

The City of Lawrence Water Utility is taking advantage of lower interest rates to reduce future debt payments.

 

The City Controller’s office announced that the City has completed refinancing the 2007 and 2009 water bonds in a deal that will reduce future Water Utility debt service payments by an estimated $230,000 a year, totaling $2.5 million. The City was able to take advantage of these lower interest rates after S&P upgraded the water utility from junk status BB+ to investment grade BBB, with a positive outlook in late September.

 

At last night’s Utility Service Board meeting City Controller Jason Fenwick said, “I am very happy we were able to get into the market today, some of the tax reform talk that is out, could potentially eliminate advanced refundings. As a result, there is an expectation that supply will be heavy through year-end and we were able to get in right before that and our savings were on the high end of what we had previously expected. This was truly a great outcome.”

 

“This refinancing demonstrates how the City continues to turn around its financial situation from the depths where we were, and it gives us financial flexibility as we plan for the future,” said Mayor Collier.

 

The Water Utility plans to use the savings for additional capital improvements, which have been neglected for many years.