Threat of trade wars with China helped secure lower rates
Last updated 7/3/2019 at Noon
Residents of Mill Creek will pay more in property taxes next year to pay for the work needed to repair major failures in the city’ underground stormwater system. But the bills will not be as high as earlier predicted as a direct result of President Trump’s threatened trade war with China.
The rate was secured at the end of May when rates were low due to the threats of renewed tariffs and a potential trade war between China and the President, according to Jim Nelson with the financial management firm DA Davidson.
Nelson told members of the Mill Creek City Council that he was able to negotiate a rate of 2.56 percent with Zion’s Bank of Washington. The rate equates to a tax-exempt interest rate of 2.44 percent for the city.
Rates jumped back to normal levels when the economic saber rattling between the world’s two largest economies did not result in a full-scale trade war, according to the spokesperson for a financial institution in Mill Creek.
Peggy Lauerman, director of Finance and Administration was pleased the city was able to take advantage of the short-term dip in interest rates.
“The low interest rate bids are a result of the current market,” said Lauerman.
The council approved a measure to apply for $3.22 million in general obligation bonds to finance repairs to the city’s aging underground surface water system. The amount is approximately $500,000 more than the estimated cost of the repairs. The extra funds have been designated to fund inspection and repair of underground pipes that were not assessed in earlier inspections.
According to one estimate by a member of the city staff, the lower interest rate could save the average homeowner hundreds of dollars over the 15-year repayment of the bond.
Meredith Cook in the city’s Communications Department said she could not give an exact amount, but estimated the “astonishingly low interest rates” will save money for both the city and taxpayers.