JUNEAU — Where municipal finance is concerned, a few days can mean a few dollars and a year can mean big bucks.

Tuesday night, the Juneau City Council advanced its new loan schedule 16 days and chopped a year from one outstanding debt.

As a result, the city expects to save about $4,700.

“A couple of things changed for the better by moving the borrowing up from April 1, to March 15,” city clerk/treasurer Gladys McKay told the council before its 5-0 vote.

“It adjusts the interest rate and decreases the payoff for one loan from 11 years to 10 and the interest rate drops from 3.75 percent to 2.75 percent,” she said.

The loan in question originally was taken by the city from the Wisconsin Trust Fund in January 2005, to allow Juneau to contribute its share, as required by law, to the then-underfunded Wisconsin Pension Fund.  

Juneau borrowed $100,744 at that time at an annual interest rate of 5.25 percent, according to a prospectus from Brian Ruechel, director of public finance for Robert W. Baird & Co., Milwaukee, who has been advising Juneau on its recent acquisition of capital to fund improvements in its tax incremental finance (TIF) districts.

At the January city council meeting, Ruechel was confident the interest rate on the 2005 loan would reset to 3.75 percent and Tuesday, McKay revised that prediction to 2.75 percent.

Originally, the 2005 loan was scheduled to be repaid in full in 2024, but now it will be paid off in 2023.

Two other state-trust-fund loans were refinanced by unanimous council action Tuesday night:  one from 2007, originally raising $75,000 at 5.5 percent per year and the other from 2010, originally for $137,882 at an annual rate of 3.5 percent.

The 2007 debt remains scheduled for payoff in 2020 and the 2010 loan runs until 2015, according to Ruechel’s report.

Refinancing approved Tuesday night reduced the annual interest rate on the 2007 loan’s recalculated principal of $50,943 to 2.75 percent, according to the council resolution.

In a similar resolution, the council reduced the annual rate on the 2010 loan’s recalculated principal of $68,989 to 2.5 percent.

Total savings from the three refinancings is expected to reach $20,489, according to a written summary distributed Tuesday by McKay.

That amount exceeds $13,737 in saved interest estimated in January by Ruechel.

The extra $6,752 will come at a cost, however.

Along with its refinancing strategy, Juneau also approved a new loan from the state trust fund Tuesday night for $1.54 million.

That money will be dedicated to infrastructure improvements in two Juneau TIF districts, with work to be concluded by the end of 2014.

The date on which that loan commences also was moved forward from April 1, 2013, to Mar. 15, 2013, according to McKay, who said the additional 16 days are expected to cost the city an extra, $1,978 in interest, an amount, she said, “is more than offset by the refinancing savings.”

Further, McKay said, “We’ll be in a better position if we can get the $1.54 million early; we’ve already incurred costs on the TIF project.”

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