PORT TOWNSEND — The City of Port Townsend has paid off two short-term bonds to save the city roughly $100,000 in interest payments.
The bonds were paid in full on Thursday.
In a unanimous decision last Monday evening, Port Townsend City Council members voted to use the city’s cash reserves to pay off just over $1.6 million in Limited Tax General Obligation bonds from 2012 and 2017.
“Paying these off now actually saves us over the next three years $100,000. It may not seem like a lot, but it’s all the little things that add up and make a difference,” said Connie Anderson, director of Finance and Technology Services, at the meeting.
Prior city staff had refinanced construction debt at lower interest rates to fund new construction projects including improvements on Washington and Howard Streets, sidewalks on Sheridan Street, the Water Street Overlay and a pedestrian walkway on state Highway 20.
The 2012 bond had a remaining balance of $585,000 and the 2017 bonds — a combination of three — had $1,060,000, all of which were paid on Thursday.
The city was able to make the payments with money available in the reserves of the general fund that were put aside during the 2023 budget-making process.
Mayor David Faber noted that paying off the bonds means the city has less money in its reserve funds.
“This does mean we have less in reserves in case we do hit a recession and tax receipts are not what we want them to be,” Faber said, adding that economic forecasters have predicted the U.S. is not headed for a recession in 2023.
In a statement, chair of the Finance and Budget Committee Monica MickHagger said she was proud of city staff working to provide the council with options.
“I’ve been determined to find ways to reduce our debt load so that we can be on firmer financial footing far into the distant future,” MickHagger said.
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