VALPARAISO | The timing seemed right to refinance a couple of bond issues, but Valparaiso's Utilities Board had no idea how right until recently.
The board's financial consultant, John Julien of H.J. Umbaugh and Associates, recommended in October the board refinance a water and a sewer bond issue because of the possibility of favorable interest rates that would save the utilities a net of about $700,000.
Now that refinancing about $13.3 million in bonds is nearly complete, the board learned it will save about $980,000, even after all the cost of the refinancing are deducted.
"The city is constantly looking for ways to meet the financial challenges brought on from increased state and federal regulations as well as aging utility infrastructure while providing the quality and reliable utility services our citizens have come to expect," Mayor Jon Costas said.
"The savings accomplished from these refundings are one illustration of the many initiatives we pursue to meet these challenges."
The city closed on the sale of the water department bonds Dec. 5 and will save $57,500 a year for the nine years left on it. The closing for the sewer department bonds is Dec. 19, and that will result in about $61,500 each year for the 7.5 remaining years.
"The savings achieved from the refundings exceeded our expectations," Julien said. "The results reflect the bond market's favorable view of the Valparaiso utilities' debt and is a reflection of the utilities' financial and management strength."
Utility Director Steve Poulos said the refinancing will free up additional money to be used on capital projects as needs arise that would not have been done otherwise.