Nearby City To Reap Millions In Savings Refinancing Debt On Utility System Cedar Park Helped Buy

CEDAR PARK, TX -- The bulk of some $7.5 million in savings through refinanced debt in Round Rock will come by virtue of its refinancing of its utility system for which Cedar Park partnered toward the purchase.

Round Rock officials on Tuesday trumpeted the envisioned savings the city will reap after getting some ratings upgrades the Standard & Poors ratings house assigned on some of its debt. Those credit upgrades enabled the city to refinance its outstanding debt, which will enable it to save $7.5 million over the life of certain bonds.

"The bulk of the savings are from the utility system refinance of $33.8 million in revenue bonds issued in 2009 to purchase a waste water treatment plant from the Lower Colorado River Authority," Round Rock officials said in a prepared statement. "Round Rock and the cities of Austin and Cedar Park partnered on the purchase."

The utility system debt is repaid through water and waste water revenues, while the general obligation debt is repaid through property taxes, city officials noted.

The utility refinance savings total $6 million, or about $300,000 a year, according to city officials. The new interest rate is 2.75 percent, compared to the original 5.0 percent, they added.

The remaining savings are coming from the refinancing of $7.4 million in certificates of obligation issued in 2007 for improvements to Old Settlers Park and participation in an indoor swim center at the YMCA, officials said.

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