GREENVILLE — Over the course of 10 years, the Greenville Downtown Development Authority (DDA) will save close to a half million dollars through the refinancing of the refunding bond.
During the DDA meeting Tuesday, Assistant City Manager Cameron Van Wyngarden updated the DDA on bond refinancing.
“It’s better than anticipated,” said Van Wyngarden, adding that in January it was estimated only about $250,000 would be saved.
Currently, the DDA is 10 years into a 20-year refunding bond. Van Wyngarden said the city’s advisers brought up the issue of refinancing because the current interest rates have dropped so low.
Michael T. Gormely, senior vice president of Hutchinson, Shockey, Erley and Co., solicited bids from 15 banks around the area. Only four banks responded.
Chemical Bank came in with the lowest interest rate at 2.041 percent, saving the DDA about $481,065.54.
“This is an excellent interest rate in today’s interest rate environment,” Gormely stated in a letter.
Other bids included Isabella Bank at 2.466 percent, Fifth Third Bank at 2.750 percent and Huntington Bank at 2.790 percent.
Van Wyngarden said the DDA could use the money saved to pay off some debt and build up a fund balance.
“With the lower interest over the 10 years, will the payment be lower as well?” asked DDA member Wendy Gladding.
DDA Vice Chairman David Ralph said the DDA should have to pay about $4,800 less a year.
“This will give us a little more cushion if the property value doesn’t increase or declines a little bit more,” Van Wyngarden said.
In January, the Greenville City Council approved the issuance of the refunding bond and the projected tax increment financing in connection with refinancing the DDA bond.
“It’s looking better than ever,” Ralph said.