The city could save several million dollars if the City Council approves an agreement to refinance its debt.
At the Nov. 12 meeting, council members will consider and possibly vote on issuing bonds to refinance approximately $26 million in debt for the raw waterline. Refinancing the debt will reduce the repayment time by four years and save $3.5 million.
“This refinancing results in significant cost savings in the amount of roughly $3.5 million over the remaining life of the issuance to Boulder City,” said Diane Pelletier, finance director. “I’m glad that we are not only saving money for the city but also meeting one of the 2025 Strategic Plan goals, calling for sound financial practices. Once again, the team in the finance department is showing fiscal responsibility and being excellent stewards of the public’s finances.”
The city is paying 3.5 percent to 5 percent interest on the debt. If the new agreement is approved, the city will pay a fixed rate of 2.06 percent, with a loan through Chase Bank. And the loan will be paid off in 2032 rather than 2036.
Zions Public Finance is advising Boulder City and sent a request to different financial institutions. It received five submissions, and Chase had the lowest fixed interest rate.
The others were from Key Government Finance, 2.37 percent; Pinnacle Public Finance, 2.35 percent; Capital One Public Funding, 2.69 percent; and Huntington Public Capital, 2.77 percent.
In the June, Boulder City voters approved a ballot question allowing the city to refinance existing debt.
According to city code, Boulder City could not incur any new debt of $1 million or more without voter approval, and the city’s bond counsel considers refinancing existing debt as new debt.
“Previously, the city could not refinance debt without a public vote; this means that when rates were lowest, we had to wait and possibly lose our chance to lock in a better rate,” wrote Al Noyola, city manager, in an email. “I’m thankful that voters understood that streamlining the process would be more effective in capturing savings, very similar to homeowners refinancing a house.”
Zions Public Finance is a registered municipal advisory firm that provides services exclusively to Nevada issuers. It also has a banking division, which includes Nevada State Bank.
The Nov. 12 council meeting will start at 7 p.m. at City Hall, 401 California Ave.
Contact reporter Celia Shortt Goodyear at firstname.lastname@example.org or at 702-586-9401. Follow her on Twitter @csgoodyear.