The City of Aspen recently took advantage of an opportunity to lower the cost on two existing bond issues, saving more than $750,000 over their life. The process is similar to refinancing a mortgage and will save approximately $73,000 a year.
“In the process of doing these bond issues, we were required to talk about the adjustments to the City’s operating budget and fully explain how we have worked to align that budget with our revenue streams going forward,” said City Finance Director Don Taylor. “The bond rating companies were assured by the financial actions the City had taken, and they are confident in our strong debt service coverage. They even raised our bond rating for the Parks and Open Space Sales Tax Revenue Bonds, which is an accomplishment in this economic climate.”
The City’s bond rating was raised from an A+ to an AA- on the parks and open space sales and use-tax revenue bonds. The bond rating increase means the City of Aspen can borrow money at a lower interest rate. The City is saving $379,911 on the Parks and Open Space sales and use-tax revenue bonds over the life of the bond issue, at present values.
The City’s general obligation housing bonds’ ratings stayed steady at AA with Standard and Poor’s bond ratings. With Moody’s Investors Services, the bonds maintained their high rating at Aa2. The City is saving $377,908 on the general obligation bonds over the life of the bond issue, at present values, due to the refinancing of the bonds.
“I’m extremely proud of our Finance Department in taking the initiative to monitor our outstanding debts and watch for opportunities to take advantage of lower interest rates,” said City Manager Steve Barwick. “Because of their hard work, and their leadership in creating a sound budget for the City, we were able to save taxpayers’ dollars.”