Lower interest rate will save taxpayers estimated $812,000

Section: Main,  Page: A16

Date: Thursday, November 4, 2010

TROY -- The City Council voted unanimously Wednesday night to pursue refinancing debt that was used to bail out the city during its 1990s financial crisis.

The $16 million in Troy Municipal Assistance Corp. bonds will be refinanced at an interest rate of 3 percent to 3.2 percent. The city currently is paying 5 percent to 5.25 percent on the bonds.

The city will save an estimated $812,000 in interest. The savings will be passed to homeowners by lowering the proposed 2011 city tax rate.

Mayor Harry Tutunjian and Deputy Mayor Dan Crawley worked on the refinancing package as part of an effort to reduce an increase in city property taxes. The proposed tax rate increase will drop to 3.26 percent. It originally was projected to be 5.5 percent.

Tutunjian unveiled his proposed $63.89 million budget in October. It set the projected tax rate at $78.76 per $1,000 of assessed valuation. The new proposed tax rate is $1.68 smaller at $77.08 per $1,000. The 2010 rate is $74.65 per $1,000.

The city owes $52.2 million in Troy MAC debt. About one-third of the city's annual $20 million tax levy is used to finance the debt payments.

The Troy MAC is expected to approve the refinancing when it meets Monday.

When the City Council meets Thursday, it is expected to vote on overriding Tutunjian's veto of a resolution requiring council approval of any action involving the demolition of the former city hall at 1 Monument Square.