ESSEX— The town will refinance up to $10 million in municipal debt, taking advantage of current low interest rates to save about $100,000 in interest expenses this year and over $500,000 in interest costs over the term of the bonds. The board of selectmen approved the refinancing at a meeting Wednesday.
The refinancing plan was developed by longtime Town Treasurer Robert Dixon. The debt, which currently totals about $8.55 million, is from the now completed Essex Elementary School renovation and expansion project that was approved by voters in a 2005 bonding referendum, with an additional appropriation for the project approved by town meeting vote in 2007. The 20-year term of the bonds runs through 2028.
Dixon said the town is currently paying an interest rate of 4.35 percent on the bonds, with refinancing expected to bring the interest rate down to about 2.25 percent. Dixon said the refinancing would also “level the principal payments,” to avoid the need for any large payment in any particular year.
Dixon said the savings on interest costs would be about $100,000 in 2013-2014, and as much as $540,000 over the term of the bonds. Dixon said the refinancing should be completed in March. The bond refinancing resolution approved by the selectmen does not require a town meeting vote.