The city of Plano’s finance department says there is no time like the present to take advantage of historically low interest rates.
Cities generally use bonds to pay for projects and expenses. Reissuing those bonds at lower rates works much like refinancing a loan, saving major dollars for the city.
"What we’re doing is what a homeowner would do,” said Denise Tacke, Plano director of finance. "We’re taking advantage of the current economic conditions and capitalizing on getting a better interest rate."
Following that individual analogy, the city is able to do this because it has a high “credit score”.
More precisely, three of the top rating agencies have given Plano’s general obligation bonds a AAA-rating, something the city can leverage to save itself on interest payments.
“We really saved about $1.3 million in debt service payments,” said Tacke.
Tacke said, with interest, that adds up to $1.6 million over 12 years.
Saving that amount of money makes the city feel better about taking on new debt and projects.
"This summer has been particularly bad for our roads,” said public works director Jerry Cosgrove.
Near downtown Plano and U.S. 75, they’re planning to rebuild infrastructure, along with two other intersection projects designed to keep traffic moving.
“[We want to] try to make it easier for people to get through an intersection. That way they don’t have to wait as long and also improve air quality in the area,” Cosgrove said.
Furthermore, Tacke explains, with the city in a strong financial position, more of taxpayer dollars can be spent actively, toward city services and projects, and less toward paying principal and interest on growing debt.