A proposal to finance bonds issued in 2012 to reduce the cost of underwriting improvements to Manteca’s municipal water system with bonds originally sold in 2003 could save ratepayers $1.55 million.

The 2012 bonds carried a 5 percent interest rate. It was low enough to save around $2 million at the time.

The refunding bonds in 2012 covered an outstanding balance of $35.84 million.

There is currently $13.95 million in remaining principal that the latest bonding will pay off on Dec. 1, 2022. It can be done without penalty, just like the 2012 issuance.

The latest refinance has a 2.31 percent rate as opposed to the current 5 percent.

After a finance charge of $371,585 is paid, the savings by the time the new bonds are paid off in late 2033 is $1.55 million.

The annual debt service of the new bonds will be $2,235,966.

The debt service payment amount when the new bonds are paid off in 2033 is $17,092,950.

 If the proposed resolution authorizing the refinancing is approved by the City Council on Tuesday, the sale of the 2026 Bonds is expected to occur during the week of March 23 with a delivery/closing date on or about April 9.

The redemption of the 2012 Bonds is expected on May 11.

The $1.5 million savings over the coming eight years won’t be refunded to ratepayers.

Instead, it will help reduce the money needed to borrow to address a long list of identified projects to upgrade sections of the city’s water system that have deteriorated over the years.

To contact Dennis Wyatt, email dwyatt@mantecabulletin.com