Grand Haven, Mich., city officials have signed a bond sale agreement that is expected to save city residents money on interest payments related to the repayment of the 2008 voter-approved infrastructure bond.
The city is issuing 2017 infrastructure refunding bonds that are expected to save approximately $65,000 every year from this year to 2028 -- a total savings of nearly $717,000.
"While not a large individual reduction in property taxes, this transaction shows City Council's determination and city administration's efforts to gain cost reductions for city services for our residents," Mayor Geri McCaleb said.
City officials note that the sale results in a reduction of approximately 0.12 mill. On a property valued at $200,000, property taxes are estimated to be reduced by $12 a year.
In July, City Council voted to issue the refunding bonds to refinance the city's 2008 voter-approved infrastructure bonds. Refunding bonds pay off an original bond and set lower interest rates for the remaining balance.
The original 2008 bond interest for the remaining term of the bond was set at 4 percent to 4.125 percent, and would cost an estimated $1.8 million in interest if not refunded. The outstanding principal on the bond was about $6.5 million, with the total outstanding amount equal to about $8.4 million.
By comparison, the 2017 refunding bond interest for the remaining term of the bond is set at a flat 2.02 percent, and costs an estimated $888,281 in interest. The refunding bond principal is $6.7 million, and the total outstanding balance is $7.6 million.
