John Julien of Umbaugh and Associates came before the Knox City Council this week to bring them up to speed on the savings associated with refinancing the outstanding debt on the Knox Community Building. In 1997, the bonds on the building sold at a 5.5% interest rate. Julien told the Council that they could now be sold at 2.9%.
“$23,000 isn’t going to make the City rich, but it’s $23,000 that you don’t have access to right now,” said Julien. “In the grand scheme of things, I think it’s worthwhile for the City to pursue. The savings aren’t earth shattering, but it’s hard to imagine that interest rates are going to go much lower.”
The savings would be $55,000 and the bonds would be paid off in 2019. This would be the same payoff time if nothing was done to renegotiate the rate. Julien did, though, say that the actual savings would be only $23,000 after costs were subtracted for the work of the bond council, Umbaugh and Associates, work of local Council, and trustee services.
Several of the council members thought the costs were exorbitant to the point of refusing to vote for the re-negotiation. In the end though they voted 3-2 with members Greg Matt and Ron Parker voting against, and Ed Blue, Linda Berndt, and Jeff Berg voting for.