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City reports sewer-bond refinancing could free about $1 million annually for wastewater projects
Summary
Lake Havasu City officials said they and their financial team are pursuing a refinancing of callable sewer bonds; preliminary estimates indicate roughly $1 million per year in interest savings that city staff plan to reinvest in the wastewater system.
Lake Havasu City officials told attendees April 4 that the city is pursuing a refinancing of its sewer bonds and expects interest savings that will be reinvested in wastewater maintenance and projects.
Mayor Cal Sheehy recounted the city’s original wastewater bond program: voters authorized a bond in the early 2000s to build sewer infrastructure, the program ran from about 2002 through 2012 and the final outstanding debt after construction refinances was roughly $330 million, Sheehy said.
Jessica Newton identified Jill Olsen, the city’s administrative services director, as the staff lead on the refinancing work. Newton said a major tranche of the sewer bonds became callable in 2025 and staff went to the market to evaluate rates. “We think we got a rate that's gonna impact us. We're able to invest those dollars. The savings that we receive will invest those dollars back into our wastewater system,” Newton said.
City staff said rating agencies (they cited Standard & Poor’s and Moody’s) reviewed the city and that the transaction carried a strong rating; Newton called it “a triple A rating on the transaction” and credited the administration for improving the city’s fiscal position.
Sheehy said the refinancing should keep the loan length the same while lowering interest expense and produced a preliminary estimate of roughly $1 million a year in savings, subject to finalization once the market transaction completes in the coming weeks. Council previously granted city staff authority to proceed with refinancing when timing in the bond market required prompt action, officials said.
No formal vote on refinancing occurred during the April 4 meeting; staff described the refinancing as an in-progress market transaction following council authorization.
