Council pays down debt to save money
The authorization to pay off a bond will save the city $76,000 in interest costs and take more than $1 million of debt from Rosemount's balance.
"It's just a common sense thing to do," said Jeff May, the city's finance director.
The city council authorized payment of a General Obligation Water Revenue Bond on Oct. 2. The bond was issued in November 2005 for the Bacardi Avenue water tower. The bond was set to be paid until February 2016.
May said the city will use money in the city's water enterprise fund to pay off the debt. By calling the bond issue three years early, May said, the city will save the $76,000 in interest and remove debt from the books. The call will occur Feb. 1, 2013. By the end of next year the debt will be removed from the city's books.
The city has been aggressive paying off debts when it's possible. May said just like in a household, the less debt the city carries, the better.
By the time the city pays off the bond, there could be small amount of surplus in the water enterprise fund. May said the amount will likely be small but the extra will be reallocated to pay off other debt.