The City of Paducah will save $200,000 in interest by refinancing bonds for police and fire department pensions. Finance director Jonathan Perkins says the refinancing proposal the City Commission is considering looks to cut the interest rate on more than $4 million worth of bonds.
“The market is right now and we decided this is a good time to refinance those issues,” Perkins said. “We estimate that will probably save us some place above $200,000 in interest saving over the next, for the life of the issue.”
A $6.1 million pension bond was issued in 2005 that eliminated the fund’s unfunded liability.
“If you refinanced your house, if the market is in such a way that you can go out, and you know, refinance your house and you paid a lower interest rate, that, that’s what this is, except it’s just on a massive scale,” Perkins said. “It’s in the millions of dollars instead of the hundreds of thousands.”
He said taxable bond rates are as low as they will get. The maturity was not extended, and Perkins added the interest savings will be applied to the principal. The bond was issue for 20 years.