The City Council has given its staff its unanimous consent to negotiate the refinancing of $4.2 million in bonds issued three years ago to pay for water system improvements.
The move could save the city more than $200,000 in interest payments over the 18 years remaining in the bond issue, according to Batavia Finance Director Terry Klein.
“Rates change every day, so we won’t know the exact amount until the refinancing is complete,” Klein said. “If we’re going to do it, we should do it now before the rates change dramatically.”
The interest rate under the 1991 bond issue averaged 6.7 percent over the life of the loan. At current rates, a new bond issue would have an average interest rate as low as 4.9 percent, Klein said.
Klein said the refinancing will be complete within 30 to 45 days.