Southbury has refinanced over $3 million of debt in several bonds to take advantage of lower interest rates and save taxpayer dollars.
The town refinanced three bonds originally issued in 2004 for capital projects including: construction of the new Southbury Public Library, renovating the old library to accommodate the Parks & Recreation and Senior Center, and updating the Southbury Police Department building.
The bonds were replaced with an average rate of 4.01 percent with a lower rate of 1.97 percent. The move will save taxpayers $241,585, or approximately $20,000 annually, over a 12-year period, according to First Selectman Ed Edelson.
The process of refinancing included a reassessment of the fiscal health of the town by Moody’s Investors Service, which resulted in a confirmation of Southbury’s Aa2 credit rating.
Moody’s said the town has conservative financial management practices that have resulted in a history of satisfactory reserve levels.
“The Aa2 rating reflects the town’s wealthy and sizeable tax base, a satisfactory financial position that derives flexibility from designated contingency funds and an aggressive pay-go capital program, and a debt burden that is expected to remain low in future years,” said the service.
Edelson emphasized that the town’s strong Aa2 rating is a key factor in enabling Southbury to refinance its debt thereby saving thousands of dollars in interest payments over the years.
With a previous refunding in 2010, the town has now saved a total of $605,727 in future interest expense, according to Edelson.