Yeah, we know that Corpus Christi needs to be fixed … and this City Council knows you have to start somewhere. That’s why we have to give a big pat on the back to the Corpus Christi City Council for a vote on March 28th that could end up saving the City of Corpus Christi an estimated $25 million.
Seems the impressive amount of savings comes from several transactions on refunding three bond issues.
- The first transaction will be the refunding of the City’s Utility System revenue obligations to the Bureau of Reclamation for the construction of Choke Canyon Dam. The projected net present value savings for this transaction is approximately $9.1 million.
- The second transaction will be a loan from the Texas Water Development Board through its Drinking Water State Revolving Fund to refund bonds previously issued for the construction of Mary Rhodes Pipeline, Phase 2. Projected savings from this transaction is over $14 million.
- The third transaction will be the refunding of any outstanding Utility System revenue bonds that would generate savings. In the current market environment, the projected net present value savings of this transaction is approximately $1.9 million.
The “refunding of a bond” occurs when a lower interest rate is obtained to generate savings.
Financial Services Director Constance P. Sanchez says the interest rate for the Texas Water Development Board bond has already been negotiated at rate of 1.77% and will generate a net present value savings for the City of $14 million over the remaining life of the 29-year loan.
Sanchez says the time is right for these bonds to be refunded because although interest rates are currently low, they have begun to increase. “The sooner we get these lower rates locked in, the better,” says Sanchez. “It will mean a significant savings for the citizens of Corpus Christi.”
So, FIX CORPUS CHRISTI is a blog meant to call the city and the city staff to account for all the things they don’t do … when they should!.
We want to also give kudos to all the good things the city council accomplishes. And this is a great example of how this city council works together … and it speaks well for Financial Services Director Constance P. Sanchez who seems to be working with the city council to save money … instead of spending all our money.