Canal Winchester officials celebrated a big win for the city after refinancing two of its current bond packages, saving $800,000 over the next 10 years.
City officials had been hoping to save upwards of $700,000 with the refinancing of the $4-million wastewater system improvements bond package and the $1.5-million bond package related to Gender Road improvements, according to Finance Director Amanda Jackson.
"Our refinancing of bonds was more successful than we'd thought it would be," Jackson told Canal Winchester City Council at its Dec. 2 meeting.
"We opted to go with direct placement and expected we'd get a 3-percent interest rate but we ended up with 2.5-percent through BB&T, a bank on the West Coast."
The city opted to use a direct placement process, which doesn't require a full public offering, in order to complete the refinancing before the end of the calendar year.
According to Jackson, if the city were to complete a full public offering process, it would be required to com-plete a new Moody rating, post the bid and hold a public hearing, all of which could take several months to complete, potentially missing out on the savings.
"We decided the direct placement route was better because it will still allow us to get rates from different banks, but with the ones we decide, instead of offering it to everyone," she said.
Ultimately, Jackson said, it was Canal Winchester's strong financial status that led to the unexpectedly higher savings.
"A lot of people wanted to participate and were very impressed by our financial status, so we had a lot of options below the anticipated 3 percent," she said.
Council approved the refinancing unanimously Nov. 18.
Mayor Michael Ebert said this is a big win for the city and he is very pleased with the results.