Kevin Bouffard, you state in your article Economic Turmoil Has Upside for Polk City that,"The financial turmoil in Washington, D.C. and the world stock markets saved Polk City $7 million over the next 30 years."
When calculating the savings you need to figure the principle amount of the bond, approximately $10.3 Million, using a standard amortization calculator, at the new 4.97%, compared to the previous 5.25%, over the 30 year period. Per my calculations, the actual savings due to the interest rate change is only $645,126.76 in interest over the entire life of the loan. Comparing the principle loan amount plus interest on the $10.3 M bond over the life of the loan went from $20,677,332.46 down to 20,032,205.70. This new interest rate also reduces the annual payment by $21,500.23, making the new portion of the annual payment for this bond to $667,744.19.
The additional 3 existing loans that are not being refinanced are obviously not being impacted by the new rate on the new bond, so no savings can be applied to that debt. Lumping all three of these loans together for simplicity, the principle amount is roughly $4,446,925.17, after the interest this amount increases to $6,456,549.60. The annual payment for these 3 combined loans is roughly $218,528.00.
When you add the new bond total debt at the new interest rate, $20,032,205.70, to the debt not being refinanced, $6,456,549.60, you still get a total debt of $26,488,755.30, with a total debt annual payment of $886,272.19. The city's annual payment will increase from the current $821,000, by $65,272.19 annually. Remind me again, how we are cutting expenses and lowering our annual payment!
Kevin, your article states, "That pushed down total principal and interest over the 30-year bond term to $19.4 million from $26.3 million estimated previously." For the life of me, I cannot figure out how you could possibly have your calculations come up with this much difference unless somehow you are adding in debt that is not being refinanced when calculating your savings. That is obviously not correct. Can you please print a correction to your article with more accurate savings numbers reflected? Your article over-estimates the savings by roughly $6.4 Million. This mis-information to the public needs to be corrected.
Well Kevin Buffoon has done it again. No surprise really, he gets most things wrong!
ReplyDeleteIt's us that are wrong.... We have let this go on far to long. We needed to stand up against this city council and the Trudy and Joe tour. They have robbed the entire city.
ReplyDeleteSaving , are you kidding Attorney Cloud is the only one saving all the money he is making off us. It is so sickening.
I'm new to the City! If these persons have truly robbed the City they should be criminally prosecuted according to the facts.Is the entire City Council corrupt? There are legitimate ways to handle such allegations. A blog is NOT the way to resolve issues. Just saying.......!
ReplyDeleteThe city has ROBBED its citizens of a secure, financial future which they had planned on when they moved here. Businesses who had enough confidence to start a business in town now face endless years of higher taxes and utility fees. Retirees who had envisioned being able to make their savings last are being forced to sell and move elsewhere, but no one wants to buy in a town where they are penalized with much higher taxes and utility costs than neighboring towns.
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