North City Water District took advantage of a brief downturn in interest rates to refinance our outstanding 2011 Water Revenue Bonds—yielding over $427,000 in savings to our ratepayers over the next ten years.
“Our proactive approach to finances makes all the difference in keeping our costs as low as possible for our ratepayers,” said District Manager, Diane Pottinger. “When we saw interest rates decline briefly last month, we knew we needed to act quickly to lock in the lower rate, given the predictions for rising interest rates.”
Working with Martin Nelson and Company, North City Water District was able to replace a 3.49% average interest rate on $4,790,000 of our outstanding bonds with a new interest rate of 1.94% (including issuance costs)—representing a 1.55% decline in cost of capital. These bonds were originally obtained back in 2011 to finance the expansion of our Administrative Offices, our new North City / Denny Clouse Pump Station, and the refinancing of some older bonds.
Key to our ability to lock in this lower interest rate was our track record of stable operations with a well managed financial profile. This generated a strong response with a range of competitive bids from a large group of banks.
Says Kern Maresca, our Director of Finance, “The refinancing process needed to unfold in an accelerated fashion, given the inflationary backdrop in the U.S. Even though timing was a bit of a challenge, given that September 1 was my first day as the District’s Director of Finance, we were able to get the process completed in record time—making this a big win for our ratepayers.”