Marksville to save $426K by refinancing street improvement bonds
Sometimes a lot of money can be saved when loans are refinanced.
When the state eliminated a requirement that sales tax-backed bonds had to retain a reserve fund, bond attorney Alan Offner recommended an outstanding bond issue for street improvements be refinanced.
Marksville was paying about $55,000 a year in interest on the 2007 bond issue. It had about 10 years to go to retire the debt. The original bond issue was for $2 million with an interest rate that started at 4.1 percent and was to rise to 4.5 percent.
The city used the no-longer-required reserve fund to pay down the principal of the loan to refinance $1.02 million over the next 10 years. The city advertised for banks willing to refinance the bond issue and got four responses. The low bid was the Lafayette-based Iberia Bank with an annual interest rate of 2.24 percent from now until the debt is retired in 2027.
Iberia said it will receive $131,719.47 in interest from the city over the 10-year period of the note -- or almost $13,172 a year.
“The city will be saving $42,611 a year in interest payments due to this refinancing,” Offner told the council.
That totals a savings of over $426,000 for the 10-year note.
On another matter, there was a touch of mystery in an agenda item to “consider an intergovernmental agreement between the City of Marksville and the Louisiana Office of State Parks.”
The item was put on the agenda by Mayor John Lemoine.
Prior to the meeting, some council members were talking among themselves about the agenda item. Discussion gravitated toward wondering if Lemoine wanted to revisit his earlier interest in having the city take over maintenance and operation of what many call the Prehistoric Indian Park and Museum. Comments overheard indicated such a move would be rejected as financially unfeasible at this time.
However, it turned out the mayor wasn’t talking about THAT intergovernmental agreement.
“It was brought to my attention that there are homes on Martin Luther King Street that are being flooded due to an obstruction in drainage that was located in the park,” Lemoine told council members.
He said he made a “verbal agreement” with the Office of State Parks whereby the state gave the city permission to send its employees and equipment into the park to clear the drainage obstruction.
Maria Trichell, aide to state Rep. Robert Johnson, said city employees “did a fantastic job” addressing the drainage problem.
Lemoine also said water has been flowing well on the street after the recent rains that occurred since the obstruction was cleared.
“So it’s already been done,” Councilman Clyde “Danny” Benson asked.
“Yes,” Lemoine said.
“We don’t have to vote on anything,” Benson responded.
Lemoine said there was no need for a vote, but he wanted to keep council members up to date on what was being done.