PRESS RELEASE - City Takes Aim at Historic Debt
City Council authorized paying off two bonds early to free up interest savings and additional resources and to provide action and momentum toward greater financial sustainability
PORT TOWNSEND, Washington – The City of Port Townsend has taken small steps – or just over 1,600,664 of them – toward paying down its debt. At this week’s City Council meeting, Councilmembers unanimously authorized defeasance (payoff) of $1,600,644.33 of Limited Tax General Obligation (LTGO) bonds from 2012 and 2017 by using current healthy reserve fund balance. The City saves just over $100,000 in interest plus early payment of the debt helps free up additional general fund resources toward delivering on city and community priorities.
Council member Monica MickHager, Chair of the Finance and Budget Committee says: “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. I’m proud of my colleagues for working through this issue as part of the 2023 budget and for staff support in providing us salient options on a viable path forward.”
For the past 20+ years, the City and nation have experienced an environment of declining interest rates. Prior staff took advantage of the lower rates and refinanced prior construction debt and the City funded new construction projects that benefited the infrastructure of the City of Port Townsend. Some of the financed projects included Washington Street and Howard Street improvements, Sheridan sidewalks, the Water Street Overlay and the SR 20 pedestrian walkway. The 2012 bond has a remaining principal balance of $585,000 and the 2017b taxable bond has a remaining balance of $1,060,000. The final payoff amount including interest is $1,660,664.33 and will be paid in full on March 9, 2023.
The approach is part of the City’s current focus on Financial Sustainability and the work underway by the Council-appointed Financial Sustainability Task Force to ensure the City continues being financially resilient and able to meet community needs and expectations over the coming decades. Connie Anderson, Director of Finance and Technology Services, says: “Our budget development process last year helped us see the bigger picture. With early debt repayment, we have new opportunities to think about how we can make better financial decisions and achieve better outcomes for the whole community.”
City Manager John Mauro adds: “This effort represents collaborative and excellent work by Council and staff. While as a City we continue to respond and react to many challenges like deferred maintenance, we are starting to look further ahead to anticipate and plan for the future our community wants. We don’t have to be scrappy or strategic – we can be both.”
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More on the debt payment/bonds and Council decision can be found here: https://cityofpt.granicus.com/MetaViewer.php?view_id=4&clip_id=2584&meta_id=213252
The 2023 Budget can be found at: https://cityofpt.us/sites/default/files/fileattachments/finance/page/15261/2023_final_budget.pdf
The Financial Sustainability Task Force and its work and meeting materials can be found here: https://cityofpt.us/engagept/page/financial-sustainability-initiative
