The City of Fayette will save $410,108.39 by refinancing its waterworks and sewerage system revenue bonds. Joey McLiney of McLiney and Company, delivered the good news to the Fayette City Council at its regular meeting on Tuesday, Dec. 15. The savings were about $150,000 better than what was expected.

Aldermen ultimately passed an ordinance and resolution authorizing McLiney to sell the bonds. The sale will close on Jan. 5, 2021.

McLiney and Company is a family-owned bond underwriter based in Kansas that serves various municipalities and school districts. 

“I was hoping to get somewhere closer to $200,000 (in savings). So we did exceptionally well,” McLiney said.

Voters approved the city to generate revenue for the consolidated water plant in 2005. The original bonds were issued in 2010 in the amount of $1,867,000 at an interest rate of 3.75% over 35 years. The new bonds have a locked-in interest rate of 2.056% over 25 years.

“It’s absolutely dynamite,” said McLiney. “It’s the one good thing to come out of COVID.” Because of the financial impact of the pandemic, the Federal Reserve has driven interest rates down. This worked in the city’s favor. Without such a decrease in interest rates over the past 10 months, Fayette would not have been able to refinance these bonds, McLiney explained.