By Gary Lloyd
The Trussville City Council on Tuesday unanimously approved an ordinance refunding its general obligation warrants from 2003.
The city council earlier this month had authorized Mayor Gene Melton to take out a loan with Compass Bank to pay off a bond issue of $4.975 million with 10 years remaining on the debt obligation.
The current interest rate on the bond issue is 4.1 percent, escalating to 4.875 percent over the next 10 years. The interest rate on the loan from Compass will be 2.43 percent.
“Banks have cash to loan,” Councilman Alan Taylor said earlier this month. “This brings the bank a better return than they can get elsewhere and it lowers the city’s interest rate substantially.”
According to the ordinance, the principal of and interest on the warrant shall be payable in monthly installments on the 10th day of each month beginning Dec. 10.
Melton said the refinancing will save the city of Trussville about 0,000.
The bonds were issued in 2003 to pay off 1996 warrants for parks, fire trucks and drainage.
Contact Gary Lloyd at news@trussvilletribune.com and follow him on Twitter @GaryALloyd.