MERIDEN — City officials are looking to refinance a series of municipal bonds, totaling $67 million, to take advantage of historically low federal interest rates before those rates are increased.
One of those bonds is a $33 million general obligation refunding bond request from city officials to refinance a state Clean Water Fund bond the city received more than a decade ago to upgrade its wastewater treatment facility. City officials also sought the council’s approval to refund another series of bonds — totalling $34 million — toward other projects completed in 2014.
The City Council, during a remote meeting held by video conference Monday night, approved refunding both bonds unanimously.
At the outset of Monday’s meeting, Mayor Kevin Scarpati announced the council was back in a virtual meeting setting “for the foreseeable future,” with COVID-19 cases continuing to rise in Meriden and other Connecticut municipalities.
During the discussion on refunding the bonds, Finance Director Kevin McNabola described the timing of the vote as “critical,” with the Federal Reserve poised to raise interest rates later this month. McNabola said approving the bond refundings on Monday is “going to save the city a significant amount of funding.”
He said between the two requests, the city could see a savings between $1.7 million and $2.5 million. Current interest rates are below 2%, McNabola said.
Bonds weren’t the only financial items on Monday’s agenda. The council authorized city officials to balance over-expended line items in the city’s fiscal 2021 budget with more than $1.357 million in transfers from other lines that had been under-expended.
One of the line items well over-budget: the amount of overtime budgeted for the Emergency Communications Center. City figures listed the overtime budget for the chronically understaffed center at $425,000. Meanwhile, the actual expenditure for overtime was $862,066, more than $437,000 over budget, according to figures.
Meanwhile, the salary line listed for the Emergency Communications Center was significantly under budget: a little more than $565,168, out of a budgeted total of $816,275, had been expended, according to figures.
According to a recent audit of city finances, the city has an overall budget surplus of more than $1.7 million.
McNabola attributed other cost underruns to reduced salary expenditures in the library, due to staffing vacancies there, and student transportation costs that came in well under budget.
In other action, the council approved a two-year lease with the Meriden Mall to temporarily relocate the Meriden Public Library during its upcoming renovation and expansion. The lease would cost $7,500 monthly, with a $90,000 annual cost.
City Councilor Michael Carabetta asked McNabola about the source of funding for the lease — whether it was the library’s construction budget, its own operating budget or the city’s general fund.
McNabola explained the funding would come from the library’s operating budget, which he noted had a significant surplus in the past fiscal year.
“I would expect to see some of that same trend this year,” McNabola said, explaining those savings would “be more than adequate to cover the lease.”