Refinancing moves save city over $1M in past 2 years

WOONSOCKET — The city has saved more than $1 million as a result of a series of bond refinancing projects dating back to March 2015, officials say.

The latest effort to cut the amount of money taxpayers owe in interest on borrowed money resulted in a savings of nearly $54,000 a year, Mayor Lisa Baldelli-Hunt announced. She said the refinancing was project was completed earlier this month.

The savings come from refinancing about $56 million the city borrowed for construction of the Woonsocket Middle School campus.

The city partnered with the Rhode Island Health and Educational Building Corporation to refinance the construction bonds the city originally obtained to build the twin middle schools in 2009, according to the mayor.

“Successfully refunding these bonds means real savings for taxpayers in the city," said the mayor.

“This administration has made it a priority to implement responsible budgeting practices and cost saving measures and we are seeing the results of that with today's news.”

The refinancing of the bonds resulted in a 1.61 percent reduction in the amount of interest the city had been paying on the bonds.

The mayor said the city took advantage of lower interest rates in the prevailing market to save money. The interest rate on the outstanding debt now averages 3.65 percent. The city had been paying about 5.26 percent prior to refinancing the bonds.

“I am pleased with the outcome of our refunding efforts, which resulted in significant savings to the city,” said Finance Director Christine Chamberland. “This undertaking was a lengthy process and was complicated by market factors that could have prevented this from happening.”

Ultimately, Chamberland said, the savings were greater than anticipated. She said the finance department will remain on the looking for similar opportunities in the bond market in the future.

The finance department coordinated the refinancing project with its fiscal advisor, First Southwest.

The advisors initiated the process with RIHBEC in October 2016.

This is the third time the city has refinanced outstanding debt to cut costs since March 2015. The prior efforts yielded savings of about $984,300.

“I’m pleased with the outcome of our refunding efforts, which resulted in significant savings to the city.” — Finance Director Christine Chamberland