In a move that is similar to refinancing your mortgage, the City of Vancouver refinanced a bond on the Firstenburg Community Center saving $932,711 in debt service payments. This proactive approach reflects the City’s strong commitment to finding money-saving opportunities.

The bonds are Limited Tax General Obligation Refunding bonds, a term given to bonds that are issued by municipalities. City Council can issue general obligation bonds up to 1.5% of the assessed value of the city.  The new bond was issued at an overall yield of 3.26% compared to 4.43% on the bond that was replaced.  The final maturity is December 1, 2029, which is the same as the prior bond issue.

During the past 10 years, the City has refinanced $54.4 million in general obligation bonds (paid from general taxes) which reduced debt payments by over $3.9 million.  Because of these refinancings over the years, the City’s average borrowing cost for its long-term general obligation bonds is about 4.2%.

This year, the City received an AA rating from Standard & Poor’s and a Aa3 rating by Moody’s which are good indicators of the city’s financial strength. The City uses this strength to its strategic advantage.

The Moody’s report stated, “Moody’s believes that city officials are committed to maintaining sound financial operations and favorable reserve levels despite recent decreases in sales tax revenues and pressure on the city’s regular property tax levy limit. The city has maintained relatively constant total general fund reserves since fiscal 2006.”

The Standard & Poor’s report notes,  “The ‘AA’ ratings reflect our view of the city’s:

·         Willingness and ability to manage its budget to sustain very strong reserves and balanced operations during a period of intensified revenue pressure;

·         Good financial policies and practices; and

·         Practice of designating revenue streams to fund general fund-supported debt service.”