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.