Savvy homeowners are not the only ones looking to take advantage of lower interest rates by refinancing loans.
Number crunchers in City Hall say Buffalo could trim $1.5 million from the cost of long-term debt service by refinancing tens of millions of dollars in outstanding bonds.
City Comptroller Anthony R. Nanula is asking the Common Council to authorize the refinancing -- or "refunding," as it's called in the municipal finance arena -- of outstanding bonds that were issued as far back as 1991.
While $110 million in bonds have been listed as possibilities, Andrew A. SanFilippo, the city's officer for investment and debt management, projected that about $30 million probably would be part of the refinancings. "We have to go to the (bond) market on Feb. 23, and we're hitting the market at the right time," SanFilippo said. "It's a lot like refinancing your home loan. You're taking advantage of the favorable interest-rate environment."
SanFilippo noted that the net savings varies depending on the terms set forth in each bond deal. But he estimated that, in many instances, the city could lower borrowing costs by 1.2 percent. He said such maneuvers should enable the city to reduce the cost of debt service by about $1.5 million through 2020.
Municipalities issue bonds to finance a variety of projects. In Buffalo's case, likely possibilities for refinancing include improvement projects at Kleinhans Music Hall, Shea's Performing Arts Center and the Broadway Market and work at numerous city parks and community centers.
The Council is expected to approve the comptroller's request during today's meeting. Council Majority Leader Rosemarie LoTempio said lawmakers have approved similar actions in prior years when declining interest rates enabled the city to reduce its cost of long-term borrowing.