NORWALK, Conn. – The savings incurred by the city of Norwalk on Tuesday won't show up in your pocketbook, but it might help in the future.
The city refunded some bonds that were issued in 2008 and 2009, Finance Director Thomas Hamilton said. "The par amount of the bond we issued was $18.985 million," he said. "It produced a total net present value saving, which is discounted based on when the savings come in ... between now and 2030."
The city had an interest rate of 2.6 percent, Mayor Richard Moccia said at Tuesday's Common Council meeting. The city's Triple A bond rating was affirmed recently.
The savings for 2012-13 are "pretty modest," Hamilton said, at $36,670. The "total present value savings" is $1.421 million, which equates to 7.1 percent of the prior debt service.
"The savings doesn't all come in at once. It comes in over many years," he said.
"Basically we're shaving the peak off our debt service, starting in 2013 through 2030."
That might prevent or lessen the severity of tax increases, he said.
"We normally have a threshold of any bond refunding we do," Hamilton said. "This exceeds our threshold benchmark. ... Over the next 20 years, the savings are pretty significant."