From the Lafayette Journal & Courier:
The West Lafayette Redevelopment Authority approved a refinancing move Wednesday that will significantly cut interest payments on one of the city’s bonds.
The bond’s current interest rate hovers between 4.4 percent and 4.75 percent. Refinancing the $2.4 million balance will drop the interest rate to around 2 percent, and the debt will still be paid off by February 2017.
“The transaction will pay for itself,” O.W. Krohn & Associate CPA James Treat said, “and we’re going to be able to reduce the payments annually for the next four-and-a-half years by $110,000 to $120,000.”
Originally, the $6.17 million bonds funded the creation of the Greenway trails and improvements around Purdue Research Park. The refinancing bonds will be paid for with funds from the Kalberer/Cumberland/Blackbird tax increment finance district.
The savings is the result of lower payments on the bonds, just as when one refinances a house, Treat said.
When the bonds are paid off in 2017, the city will apply those TIF funds to pay off the fire station under construction along Kalberer Road, Treat said.
The bonds for the fire station are scheduled to be retired in 2019. Currently, that means there would be no more bonds in that particular TIF district. But since that is a developing area of West Lafayette, there’s a good chance city officials will designate the TIF funds for a future project, Treat said.
http://www.jconline.com/apps/pbcs.dll/article?AID=2012307180025&nclick_check=1
