LOS ANGELES — The San Diego mayor's office said it has saved $300 million in aggregate cash flow savings on refundings the city has conducted over the past 12 months.
The range of net present value savings ranges from 7% to 22.6% for the eight refundings, according to Craig Gustafson, a mayoral spokesman.
"The goal is to get the most value out of every tax dollar. We're continually looking for new ways to improve city finances and direct the savings right back into our neighborhoods for street repair and other infrastructure improvements," San Diego Mayor Kevin Faulconer said in a release. "By taking advantage of historic lows in interest rates, we're paying millions less in debt and will have millions more available in future budgets for priorities such as roads, water and sewer projects and parks."
The bond refinancings took place over the course of the past year and involved $1.7 billion in debt that was issued to construct the Petco Park baseball stadium, redevelopment projects, neighborhood improvements and various water and wastewater projects. The amount refinanced represents approximately 55% of the city's total outstanding debt.
The city will pay off this refunded debt in annual installments over the course of 16 to 24 years, according to the release. After these various refinancings, the average annual savings for the city over this period will be nearly $13 million.
Now, instead of paying off debt service, that money can be used for priorities such as fixing streets, upgrading neighborhood infrastructure and funding new water and sewer projects, Faulconer said.
Prior to the refinancings, the interest rates for the bonds had averaged as high as 5.9% with none below 5%. After the refinancings, the interest costs now range from 2.34% to 4.04%.
The refinancings were from June 2015 to June 2016. The last one has not priced yet and represents anticipated savings of $3 million in cumulative savings on maturities now ranging from 2017 to 2038.