City of Blaine saves over $2 million by refinancing sewer utility fund debt

On September 22, the city of Blaine sold a total of $5,280,000 in tax-exempt refunding bonds, taking advantage of low interest rates to pay off two water and sewer loans. Refinancing that debt that will save more than $2.2 million over the next 30 years, according to a press release from the city’s finance department.

The U.S. Department of Agriculture issued the city the original loans in 2010 to pay for construction of the city’s wastewater treatment plant. Refinancing will save money from the city’s sewer utility fund, which is funded by sewer ratepayers.

Interest rates averaged 2.3 percent on the new bonds, compared to 4.125 percent on the larger loan and 4.5 percent on the smaller loan being refinanced, according to the press release.

“It is gratifying to be able to take advantage of low market interest rates,” said Jeffrey Lazenby, finance director for the city (Lazenby is not related to the reporter). “The refinance will ultimately benefit the sewer system utility and, therefore, its ratepayers in the long run.”

Lazenby added in a phone interview that the new interest rate on the bonds was better than he expected; he had anticipated a rate of about 3.5 percent.

D.A. Davidson and Co. in Seattle is the city’s underwriter for the bond.