From City Hall: Newton Refinances $22.7 M Saving $1.6 M

In anticipation of the tax reform law passed through Congress and signed by the President, the City of Newton was able to take swift action in mid-December to save a total of $1.6 million in interest payments over the lifetime of a number of bonds.

Under the Warren Administration the City has now successfully “advance refunded” or “refinanced” almost $150 million of debt generating more than $20 million of total interest savings over the life of that debt.

“Advanced Refunding” of municipal bonds is very similar to “refinancing” a home mortgage, but can only be done one time during the life of the bond. As part of the GOP Tax Reform Bill, “Advanced Refunding” of tax-exempt municipal bonds has been eliminated as of December 31, 2017.

“As a result of our comprehensive financial management during the past eight years we have created a rainy day fund of $22 million, instituted payment schedules for our long term liabilities, pursued a school building program that includes five new elementary schools in six years, developed an unprecedented accelerated road paving program, provided exceptional services, including unparalleled public safety, for our residents, and positioned the City to act quickly to avail ourselves of this one final opportunity to generate significant savings of interest payments through an ‘advanced refunding’,” Mayor Setti Warren said.

“This would not have been possible without the hard work and partnership of City Council Finance Chair Lenny Gentile and his colleagues and the city’s CFO Maureen Lemieux.”

-Stephanie Foner works as Director of Community Engagement for Mayor Setti Warren and can be reached at: sfoner@newtonma.gov