City of Fortuna Says Latest Refinance Will Save About $300,000 Per Year
Press release from the City of Fortuna:
The City of Fortuna has demonstrated its stewardship of ratepayer dollars by keeping a watchful eye on the bond market. Yesterday, the City concluded efforts to capitalize on favorable market conditions to refinance $17 million in bonds including wastewater utility debt ($10.7 million) and water utility debt ($6.5 million).
“We realized that refinancing the outstanding debt was the right thing to do and that now was the right time to do it,” said City Manager, Mark Wheetley. “The result is significant savings for Fortuna’s water and wastewater ratepayers – the combined net savings will be over $3.9 million over the life of the bonds, reducing total payments by approximately $300,000 per year.”
The City was able to take advantage of low interest rates to refinance its 2006 Wastewater Revenue Bonds and 2006 Water Revenue Bonds, significantly reducing borrowing costs. The City received strong credit ratings from Standard & Poor’s (S&P) on its water and wastewater utilities, with the water enterprise rated “A+” and the wastewater enterprise rated “A,” both with a stable outlook.
“In our role as responsible stewards for the community’s fiscal resources, we worked in tandem with our team of fiscal and legal experts to navigate and evaluate every step of the bond refinancing process to reach this successful conclusion,” said Fortuna Finance Director, Aaron Felmlee. The City is also assessing opportunities to refinance tax allocation refunding bonds as the Successor Agency to the former Fortuna Redevelopment Agency.
Mayor Sue Long stated, “The City of Fortuna is committed to the longstanding practice of conservative financial decision making. The City Council and staff are ever mindful that to be worthy of the public trust, we must strive to provide efficient and cost-effective services to the citizens of the Fortuna community. The success of these efforts demonstrates that commitment.”