In 2004 the City of Alpena used bonds to come up with the money that was used toward the construction of the new department of public works building. The payment on the bonds was spread out over 25 years, but because interest rates are so low the city is taking steps to rework the payments.
Clerk/Treasurer Karen Hebert said there is still more than a decade remaining on the original bonds, but in order to safe money the Alpena Municipal Council has decided to sell the bonds it has now.
"Essentially what we are doing is selling the old bonds and purchasing new ones at a lower interest rate," Hebert said. "There will still be the 17 and a half years left on them and that is what we will finance the new ones as too. In all, the city will save about $114,000 from doing this."
Hebert said the bond payments will range from $109,000 to $131,000 a year and the city will save an average of $ 8,800 a year. The bonding issue will be handled by Bendzinski & Company and Miller and Canfield both of which have worked with the city on similar bonding deals for more than 20 years. Hebert said it might not seem like $8,800 a year is much money, but she said when you're working with a tight budget that much money can really help.
"What it does is frees up money for other projects or maybe purchasing a new piece of equipment," Hebert said. "It isn't a large amount, but the money can be very helpful."
The city has been paying down its debts for the last several years and because of this Hebert said the city could choose to utilize grants more in the future. She said there is a lot of work that needs to be done in the city and more bonds might be the best way to go, to pay for future improvements to the city's infrastructure.
"This will also help us to maybe look into another bond project down the road. Right now we aren't burdened with a lot of debt, which is good," Hebert said. "I think it will have to mostly with the water and sewer where we'll have to borrow for. That is where we have the greatest expense and the biggest need in terms of large projects that need to be done."
The council voted to approve the bond sale and purchase. Hebert said the process should be complete in a couple months.
Steve Schulwitz can be reached via email at email@example.com or by phone at 358-5689. Follow Steve on Twitter ss_alpenanews. Read his blog, Upon Further Review ... at www.thealpenanews.com.