Houston Expects $100m Savings From Bond Refinancing

The City of Houston is jumping on lower interest rates to refinance its debt. The city hopes to use the savings to help soften the blow of recent budget cuts.

Right now, Houston has about $13 billion of debt in the form of various bonds to pay for long-term infrastructure projects — things like water and sewer systems, streets, and police and fire department buildings. 

The city recently completed a year-long project to refinance those bonds at some of the lowest rates in decades.   The re-fi is expected to save the city $100 million over seven years.  Controller Ronald Green says half the savings will come right away. 

“This year, alone, next fiscal year, we’ll save $50 million just in our debt service payments.  A lot of the savings we have here is front-loaded.  So, although the savings is over a seven-year period, a lot of it is over the next year, next year-and-a-half to two years.”

Controller Green says this will help the city take some of the sting out of the cutbacks it was forced to make earlier this year.

“When we have more money to spend elsewhere, that means fewer library hours get cut.  We could, hopefully, open pools a little bit longer. We’re still in a very guarded position, financially, so I don’t think you could expect to see a tax cut anytime soon.  But when the debt service goes down, that certainly does free up money for other day-to-day operations.”

Green says the bonds were refinanced without any additional time tacked on to the maturity dates.  And with some of the bonds, those dates were actually shortened. 


David Pitman

David Pitman

Host, Morning Edition

Hi there. I’m glad you found me. Let me take a moment to answer some of the questions you might have about me and my job. I have worked as Morning Edition Host and reporter at News 88.7 since August of 2009. Previously, I hosted Morning Edition at WMFE in...

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