Windsor town board talks refinancing that could save the town $3.2 million
November 12, 2016
Windsor's town board might have the chance to save the town $3.2 million in the long run by refinancing some of its debt.
The municipality's debt and what options the town board has to refinance, or pay off part of it, dominated discussion during a work session Monday night.
In the town's new strategic plan, officials identified a desire to "explore the options for retiring existing debt."
Although the town could find a way to pay off all $30.7 million in debt, it would eat into what funds the town has easily on hand in the future, said Town Manager Kelly Arnold. With an aggressive capitol improvement plan and a desire to pay cash — instead of acquiring more debt — on future projects the town board will need those funds, he said.
“In the town’s new strategic plan, officials identified a desire to “explore the options for retiring existing debt.”
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The refinancing plan Windsor Director of Finance Dean Moyer recommended would save on interest by lowering the interest rates and shortening the term on two debts. As they stand, come 2017 the debts, one associated with the Kern Reservoir and the other with Windsor's police facility, would have a remaining balance of $3.4 million with 5.1 percent interest and $2.6 million with 3.75 percent interest respectively.
While the refinancing would save money in the long term, it would increase the town's annual payment on both loans together by $258,828 until they're paid off in 2027.
During the work session discussion, town board member Christian Morgan pointed out that while refinancing would save the town money, the increased payment would slow the town's ability to build cash reserves.
However, refinancing would save the town money and maintain the cash reserves town board members Brenden Boudreau and Myles Baker both stated.
Not only does Windsor have some large projects in the future, but as a town hit by the 2008 tornado, everyone in Windsor should appreciate the need for have funds available to deal with unexpected disasters, Baker said.
That echoed Moyer's recommendation to the town board in a memo.
"In our recent history we have had calls for large sums of cash that we had not expected," he said in the memo. "Fortunately we had cash reserves that we were able to draw upon to either weather an emergency or contribute to a worthy project we had not anticipated at budget development. In that light I recommend that we proceed with the proposed refinance."
In the end, the town board decide to ask Moyer to come back a month later with more information about the process of, and fees associated with the refinancing plan.