Lowell advances plan to refinance water utility bond

LOWELL | The Town Council has approved the next step toward refinancing the municipal water utility's bonds to save an estimated $400,000 in interest payments.

Lowell Clerk-Treasurer Judy Walters was given permission earlier this week to have financial consultant Greg Guerretaz move forward with a due diligence report. It's a move Guerretaz, president of Financial Solutions Group, had suggested last year.

Walters said Tuesday the 1994 water bond currently has $4,122,000 outstanding at 5.25 percent with a final payment date of Jan. 1, 2029.

The original 1994 bond with Rural Development, part of the U.S. Department of Agriculture, was $6,070,000 for 40 years. It was later reduced to 35 years, she said.

"The recommendation is to have the proposed annual payments, but shorten the life of the bonds," Walters said. The estimated savings would come from the reduced life of the bond and what is expected to be a reduced bond rate, given the current market.