Finance Committee recommends refinancing some city debt at lower interest rates

Posted: Feb. 12, 2013 11:12 am Updated: Feb. 26, 2013 3:15 pm

Herald-Whig Staff Writer

The Quincy Finance Committee has recommended the City Council approve a plan to refinance one bond and one loan to save the more than $210,000 in interest payments.

A general obligation bond sold in 1996 to help build the Oakley-Lindsay Center has $825,000 remaining in principal. The city has paid 5.75 percent annual interest. The committee agreed to recommend moving to a 1.6 percent annual rate from First Bankers Trust, which will save the city $72,623 over the next four years. The bond is paid through the city's hotel-motel tax.

The city also received bids on refinancing a loan used for the heating and air-conditioning upgrades at City Hall. There is $917,031 remaining on the loan, and the committee recommended refinancing with Peoples Prosperity Bank at 2.08 percent annual interest over seven years, which would save the city $141,083 in interest payments and knock 30 months off the payment schedule.

"We would have the option of taking it to a shorter term, which would increase our payment," Comptroller Ann Scott said. "We do have money in the green energy fund for debt service that we can use for that."

The city has a monthly payment of $9,888 for the HVAC loan. By reducing the length to seven years, the city would see monthly payments increase to $11,834.

The $1.3 million project replaced the old boiler with two new ones and installed new rooftop AC units, which created 62 independent heating and cooling zones in the building. The city has using energy savings from the project to pay off the loan.

In other business, the committee forwarded a proposal to the City Council to hire AC Excavating of Liberty for $7,600 for the demolition of 501-503 N. Fifth. The property is included in the city's "fix or flatten" program.