The village of Oswego is expected to save just over $1.5 million in interest costs over the next 15 years as a result of a village board vote earlier this year to refund three separate bond issues.
The village previously sold the bonds to finance the construction of the village police station at 3355 Woolley Road. The $30 million police station was completed and dedicated in October 2018.
In a statement, village officials likened the refunded bond sales to a homeowner refinancing a mortgage to obtain a lower interest rate.
“Municipalities with outstanding debt can sometimes issue new bonds to pay for their existing bonds at a lower rate, a practice called refunding, and save money over the long term,” the statement reads.
At the direction of the village board in May, village staff reviewed the village’s outstanding debt and presented the three outstanding bond issuances dating back to 2016 that had matured enough to be at least partially refunded.
In June, savings were initially estimated at about $1 million. But with the refunding now finalized, village staff have confirmed the village will actually save $1.58 million that otherwise would have been lost to interest payments.
“By refinancing tax-exempt bonds as taxable bonds, we were able to take advantage of low interest rates in the market and deliver huge savings for our residents,” Village President Troy Parlier said in the statement. “This is a great example of out-of-the-box thinking.”
The bond refinancing is just one of several cost reduction measures initiated by the board.
The board has lowered the village’s tax rate for the last two years. And in late 2019 the board voted to lower water rates by 20 cents per hundred cubic feet. The new rate cut water bills by about 3.7 percent or $17.40 annually for the average village resident.
Additional information on the village’s financial condition can be found at: www.oswegoil.org/financial-reporting.