Katy saves city money by refunding bonds

Katy financial advisers say a recent refunding sale of voter-approved general obligation bonds was "very successful" and will save the city about $192,000 in finance charges over the remaining six-year life of the bonds.

Adviser Eugene B. Shepherd briefed the City Council on the sale at its March 14 meeting. He said the new 4.219 percent average interest rate on $3.3 million in city capital improvement bonds will save the city an average of $32,000 per year.

An Aa3 rating on the sale by Moody's Investors Service is like a "city report card" and attests to Katy's "very sound fiscal management," ample reserves and growth in value, he said. Standard & Poor's gave the bonds a "very significant" AA+ rating, which Shepherd said was one notch under their highest triple-A rating.

Katy held the refunding bond sale to take advantage of lower interest rates and to cut the cost of borrowing for voter-approved capital improvement projects like streets, drainage and parks. The cost of the sale was $75,000.