LAKEPORT >> The City of Lakeport recently adopted a Debt Management Policy to keep track of funds and help decrease payments for residents.
The Finance Department has been working on the policy to go along with the refinancing projects underway. The policy is required by California debt and investment advisory commission when there is a significant amount of debt in a city.
The city addressed the issue with 12 banks as they looked to refinance the bond with a lower interest rate. The lowest that was found was around a 2.8 percent. If this particular bid does not work out for the department, the next lowest would be a 3.11 percent.
Since the search of the Department, the city has done multiple refinancing to lower the interest rate cost of various debts they have according to Nicholas Walker, Finance Director of Lakeport.
“The city maintains various issues of debt, bonded, debt, loans and leases. So far in the ’16, ’17 the city has refinanced several pieces of that debt to result in significant interest saving for the city,” Walker said.
Walker said there are other positive aspects to having the debt management policy put in place such as good business practice.
Council member Kenneth Parlet said he questioned as to why this policy was not enacted on sooner because it would give the city more points on ratings, which then give the city lower interest rates.
“It’s something we’re doing now to make our portfolio more attractive to all of those who go out to California or come from out of state looking lower interest rates,” Parlet said.
One of the major refinances that is looking to make is in the sewer bond that was used for property owners that were in a sewer assessment. They are looking to make a lower rate on the sewer bill for those who had their property treated by the City of Lakeport Municipal Sewer District (CLMSD).
With the lower rate on the bond, it could potentially create $1.2 million savings over the next 15 years.
