Council to consider refinancing retirement funds to save $2.5M

The Metro Council will consider refinancing up to $60 million of city retirement funds at its meeting Wednesday. A resolution calls for the council to give preliminary approval to new bonds that would cover promissory notes now financing public pensions. Bond attorney Richard Leibowitz says the move should “save quite a bit of money” due to the lower interest rate: around $2.5 million. “In 2011, the taxable rates are very, very low,” he says. “It’s an opportunity they didn’t want to pass up.” Leibowitz says the current bonds, issued in 2002, carry 7% interest, and that he expects the new rate to go no higher than 5.75%. “The only way to know for sure is when Morgan Keegan sells it to investors,” he says. “It might be lower, but we’ll pull back if it’s any higher. We’ll monitor it to make sure they can save the $2.5 million.” He says the savings would stay within the retirement system. If the resolution is approved by the council and then by the State Bond Commission, the new rates would go into effect in November or early December. Leibowitz says he foresees little opposition to the measure from either body. “I can’t imagine them not approving it,” he says. Also Wednesday, the council will consider allocating $900,000 in riverfront project funds toward local bridge improvements and the creation of a deputy chief of police position. The council meets at 4 p.m. on the third floor of the Governmental Building, 222 St. Louis St. —Ian McGibboney