City committee recommends refinancing city debt

The city finance committee Tuesday gave a positive recommendation to City Council to allow the administration to pursue refinancing existing bonds issued in 2013 and 2014 to pay off city debt.

“It’s deja vu with 2013,” said William E. Nichols Jr., city finance director, of the M&T Securities offer to redeem the bonds with issuance of a bond of $21.2 million with a maturity date of 2038.

“I want to recapture low interest rates now between 1.5 and 2 percent,” Nichols said.

Debt to be paid includes that of River Valley Transit, Williamsport Parking Authority and the bond refinancing package will keep cash flow for another decade of purchasing natural gas buses.

Should council approve the bond redemption offer, the expected savings to the city this year will be $150,000, and $150,000 in 2018, Nichols said.

“What we will owe is interest free,” at maturity in 2038, he said.

Councilwoman Liz Miele asked questions related to whether the loans would be paid off and the city would realize savings. This is paying existing debt and not putting it into a capital improvement project.

City Controller Margaret Woodring asked bond officials if the rate would be fixed through the life of the term and was assured they would be locked in.