The Islip Town board approved a resolution this week allowing the refinance of $36.8 million in outstanding bonds in order to take advantage of unusually low interest rates.
Town Comptroller Joseph Ludwig said that with interest rates anticipated around 1.5 percent, the move could save Islip roughly $2 million in seven years.
Ludwig said the action is similar to refinancing the mortgage on a home. The town’s public improvement bonds from the years 2001, 2002 and 2004 have been paid off to the point where they can be refinanced — and the town’s financial advisers suggested action while interest rates are favorable.
The three bonds, which Ludwig said were created for various capital projects such as repaving roads, were initially sold with a 4.5 percent interest rate attached which, Ludwig said, “isn’t that bad.”
“I can pretty much guarantee that every municipality’s fiscal adviser is constantly reviewing their outstanding debt and giving them that option” to refinance, Ludwig said. “I don’t know any reason why a municipality would not take advantage of going out and doing a refinance.”