Mayor Cooper announces plans to refinance Metro Nashville debt to save taxpayer dollars

Posted at 1:53 PM, Dec 17, 2020
and last updated 2020-12-17 14:53:13-05

NASHVILLE, Tenn. (WTVF) — To take advantage of currently low interest rates, the Metro Nashville government plans to refinance debt in an effort to save taxpayer dollars, Mayor Cooper's office announced Thursday.

This strategy will come in the form of two refinancing actions.

First, the Metro finance office and Mayor Cooper's office will file a Metro Council resolution Friday to authorize the refinancing of $629 million in general obligation bonds. This plan was approved by Tennessee's comptroller earlier this week.

According to Mayor Cooper's office, this refinancing plan is projected to save taxpayers in Davidson County over $44 million over the next 20 years.

"Hardworking Nashville families have to manage their budgets responsibly, and we must do the same thing in Metro government," Mayor Cooper said. "Just as any resident would look for the best available terms on a mortgage or car loan, my job is to make sure Nashville's taxpayers get the best deal possible."

In recent years, debt service costs have become a larger share of Nashville's overall operating budget. This refinancing plan will help the Metro government to prioritize other city needs, including schools and emergency response. It will also create an opportunity for neighborhood infrastructure investment.

Mayor Cooper's office also plans to file the second refinancing resolution Friday. This resolution will be to authorize the refinancing of $650 million of commercial paper, short-term debit into long-term, low-interest general obligation bonds.

Nashville could hit its cap of $700 million in commercial paper by early 2021. With this resolution, Nashville's government would have restored access to commercial paper, offering flexibility and the ability to resume previously authorized capital spending. Such projects include non-emergency repairs to sidewalks and roads, as well as planned projects for schools, libraries, bikeways and community centers.

Non-essential capital spending was frozen in the spring due to the impact of COVID-19 on Nashville's revenue. This freeze will remain in effect until both refinancing resolutions are complete.

Mayor Cooper will bring forward the next annual capital spending plan for Nashville in early 2021. Mayor Cooper's office says this will address deferred maintenance needs and an initial round of projects in Nashville's Transportation Plan.