Paying off the Durango Public Library will get a bit cheaper next year and help the city set aside more money for road projects.
The city estimates it will save $825,000 over nine years after refinancing $9.6 million in debt, according to city documents. A $15.9 million bond was issued in 2007 to partially finance the library on East Third Avenue. The library’s construction cost $11 million.
“We believe we entered the market at a great time and the end result will be a much lower interest rate,” said city Finance Director Julie Brown in an email.
If the city had not refinanced, it would have continued to pay around $1.25 million a year at about a 4 percent interest rate, said Jim Manire, a city consultant who works for First Southwest Bank.
In 2017, the city will pay between $1.18 million to $1.83 million a year at about a 2 percent interest rate.
The Durango City Council recently approved refinancing the debt at an expected 2.04 percent interest rate.
The terms of the new loan issued by JP Morgan Chase Bank will be final on April 22. The lower interest rate will take effect in 2017.
The savings can be used to pay for the Florida Road, which will allow more money to set aside for future road projects, City Manager Ron LeBlanc said.
The city started the year with about $35 million in debt, according to the 2016 budget. But it cannot refinance any other bonds at this time, Brown said.
The city is currently paying off Florida Road, the Durango Community Recreation Center, Wilson Gulch Road and the Animas River Trail.