|
|
The largest amount of savings will be realized in the first three years. In 2010, almost $50,000 will be saved and in 2011 and 2012, $276,700 and $278,643 will be saved respectively. After that, yearly savings will range from a low of $281 to over $6,000.
"It's really good news that we could pull this off and achieve such a large savings.
When we went to the town bodies [the Board of Finance and Representative Town Meeting] to authorize the refinance, our goal was to save one-half million dollars, but we waited to time it right, and now we are saving $646,000," said First Selectman Ken Flatto.
"There were two other factors that helped drive low rates. Fairfield bonds are really sought after and there were over five times as many customers (as expected)," Flatto said.
Over 89.3 percent of the town's revenue comes from property taxes and the town has had a 98.8 percent collection rate on taxes for the past year, but it has often had a 99 percent collection rate in the past, according to the tax collector's office.
Other town revenue sources include state and federal assistance at 3.6 percent and other fees that the town charges at 7.1 percent.
Morgan Keegan was the underwriter of the bond refinancing and it is not known who actually bought the bonds, but Flatto said that he thought bidders may have included Goldman Sachs, Travelers Insurance Company and JP Morgan, who may have sought the bonds for their mutual funds.
The old average interest rate on the three bond issues that were refinanced was 3.12 percent; the new average interest rate is 2.8 percent.
The town will pay $26,752,689 on bond principal and interest for the present 2009-2010 fiscal year that began July 1. That is exactly $49,653 less than was budgeted.
That $26 million budgeted for debt service this year is 10.63 percent of the town's total 2009-2010 budget of $252,104,864. Of that total, the town operating budget is $82.6 million or almost 33 percent. The education budget of $142.66 million or not quite 57 percent of the total budget.
