Refinancing to save city $2.5 million

Combining and refinancing the general obligation bonds issued for Woodland Water Park and Fire Station 62 at lower interest rates will save Kalispell more than $565,000 over the next 10 years.

The Kalispell City Council unanimously passed a resolution Monday authorizing the refinancing.

The refinancing was initiated and overseen by Finance Director Amy Robertson, who is retiring at the end of this month.

With bond sales expected to close June 28, it cuts average interest rates for the two permissive-levy projects from 4.46 percent down to 1.59 percent. Kalispell voters approved a levy for Woodland Water Park in 2002 and a levy for the north fire station in 2005.

Those lower interest rates will mean a one- to two-mill reduction in property taxes levied for the two projects. That reduction will show up on November’s property tax bills, Robertson said.

“We are reducing taxes. Not by a lot, but we are doing it,” Mayor Tammi Fisher said Monday. “This is a fabulous way for Amy to go out on retirement.”

Robertson also is working with the Montana Department of Natural Resources and Conservation to get lower interest rates on more than $20 million in water and sewer projects Kalispell has financed through the state agency’s revolving loan fund.

A large portion of that is debt for the 2008 expansion of the city’s wastewater treatment plant.

“That will take another month or so to get to council, so there’s a little delay but it is in the works,” Robertson said.

The state has agreed to cut its fixed lending rates for Kalispell from more than 4 percent now to 2.25 percent for 15-year debt, 2 percent for 10-year debt and 1.25 percent for five-year debt, Robertson said.

“We have some [debt] in each of those categories, so we’ll see an assortment of rates,” she said. The changes are projected to save Kalispell more than $2 million on interest payments over the next 15 years.

After Kalispell’s request, the Montana Department of Natural Resources and Conservation plans to extend those reductions to other cities as it tries to keep its revenue-generating municipal lending program competitive amid record low interest rates, Kalispell City Attorney Charlie Harball said.

“When we let them know that we were shopping around for better rates, they became aware other cities were shopping, too, and realized they better get competitive,” Harball said. “With the rates we’re dropping to, it makes better sense for us to stay with them” than refinance.

Reporter Tom Lotshaw may be reached at 758-4483 or by email at tlotshaw@dailyinterlake.com.