Community

Poulsbo Fire's bond re-fit will save $56,000

POULSBO — Kitsap County Fire District No. 18 took advantage of historically low interest rates in the municipal bond market and refinanced its 2002 General Obligation Bonds.

The refinancing will reduce debt repayment costs by approximately $50,000 in 2013 and another $6,000 thereafter, district spokeswoman Jody Matson reported.

These original bond proceeds were used to finance the construction of a fire station and training facility.

Working with Martin Nelson and Company, the district — commonly known as the Poulsbo Fire Department — was able to replace the 4.9 percent average interest rate currently paid on its outstanding 2002 debt with a new rate of 1.78 percent.

The district bonded for $2 million in 2002 to build Station 77 (1305 NW Pioneer Hill Road, Poulsbo) and the training tower there, Administrative Services Manager Lise Alkire said.

The district owes $865,000. The loan will be paid off in June 2017, Alkire said.

In addition to the low interest rate, the district achieved its refinance without the use of a credit rating from Standard and Poor’s. The district’s debt is currently rated “A+” by S&P, but the department was able to forego the cost of rating the new replacement debt and still achieve “A+”-level interest rates.

“We know our residents are concerned about the economy and we felt these cost-reduction efforts were important,” Fire Chief Jeff Griffin said. “The district chose to enter the bond market now so that taxpayer savings could be achieved while interest rates are still at generational lows.”

The refinancing opportunity surfaced in January after the 2002 bonds became callable. “We felt that completing the project now before the savings eroded with any principal paid in future periods, would be very timely and provide the community the highest possible savings,” Alkire said.

 

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