The city of Toccoa will save hundreds of thousands of dollars after re-financing the city’s loans with the Georgia Environmental Finance Authority.
Last Wednesday, Robert W. Baird and Company of Atlanta presented its recommendation for re-financing around $6 million in GEFA water/wastewater fund debt the city has to Toccoa City Commissioners at a work session.
City commissioners had tasked Baird in March with soliciting proposals.
Baird’s Brian Ubell said that out of four proposals received, First Citizens Bank offered the best proposal, with an interest rate of 1.55 percent.
He said that rate will provide even more savings than Baird estimated going in, while not extending the term of the debt.
“You see $61,000 a year and almost $480,000 (in savings) over the remaining life of the debt,” said Ubell about savings over the eight-year re-financing of the debt.
When discussing whether to re-finance the debt, Baird had estimated a 2.25 percent interest rate and a total savings of somewhere around $300,000 to $325,000.
The GEFA debt was previously structured into three different debts with interest rates ranging from 3.75 to 5.21 percent, with a pay-off date of 2021.
Ubell said he believes the proposal from First Citizens meets the city’s key objectives, including the lowest rate, flexibility regarding pre-payment, and use of a local institution.
Toccoa Mayor David Austin said he is very pleased with the proposal.
“The rate is much better than we anticipated and I do like to see that a local bank got it,” said Austin. “That is great.”
Following the work session, Toccoa City Commissioners voted unanimously in a called meeting to accept the proposal from First Citizens and put the savings from the re-financing into the city’s renewal and extension fund for the water system.