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January 17, 2013
GROSSE POINTE WOODS — Taking a page from homeowners who are refinancing their mortgages to secure lower interest rates, officials in Grosse Pointe Woods are refinancing some bonds to take advantage of lower interest rates in the bond market.

Acting as a committee of the whole at a meeting Monday, Jan. 14, the Grosse Pointe Woods city council approved an ordinance allowing the city to refinance its water and sewer bonds originally issued in 2003 at an interest rate varying between 3.1 and 3.9 percent. The new rate would be set at 2 percent, saving the city $195,000 over the life of the bonds.

“There’s no reason in the world not to do this,” said Mayor Robert Novitke.

The ordinance would authorize re-issuing $3.5 million in Water Supply and Sewage Disposal System Revenue bonds that would then be used to repay the higher rate existing bonds. The ordinance needs to be formally approved by the city council, which it is expected to do at its Jan. 28 meeting.

The projected savings will not impact the city’s general fund, as the money must stay with the Water Sewer Enterprise funds. However, as council member Vicki Granger pointed out, the money will help ease any fluctuation in rates from the City of Detroit, the Woods’ water supplier.

“It’s fiscally prudent to have a financial cushion since we can never predict what the City of Detroit water department is going to do next,” she said.

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