The town has been able to take advantage of historically low interest rates to refinance the bonds it sold for renovating the Town Office Building 10 years ago — a move that will save approximately $60,000 a year for the next 20 years.
The town sold 30-year bonds totaling $5.8 million to pay for the project a decade ago (another $1,000,000 came from the Community Preservation Fund). The deal included a bond call option so the town could refinance after 10 years if interest rates dropped — and they did, from 3.6% to the new rate of 1.18%, according to Lincoln Finance Director Colleen Wilkins. The lower interest rate will save about $1,278,000 over the next 20 years. At the same time, the town’s AAA bond rating was also reaffirmed.
The semiannual payment on the bonds varies each year as result of the annual principal payments reducing the interest expense each year, and the average annual savings won’t be known until the closing, Wilkins said.
The Town Office Building, which began life as the historic Center School, lacked handicapped access and needed better space utilization and greater energy efficiency. A study committee made the case for the project at the 2010 State of the Town Meeting, and residents approved the project in March 2011.
Thank you, Colleen!
Congratulations to Colleen and our capable town staff. Thanks for keeping on top of opportunities to improve Lincoln’s financial situation and preserve our financing flexibility going forward. We are fortunate, indeed for your service.