Wildwood may save nearly $1.2 million by refinancing a $5.4 million loan at a lower interest rate.
The money was borrowed in 2018 primarily to finance construction of the city’s new police station.
Five banks bid to refinance the loan and the winning bidder was Citizens Trust Bank with an interest rate of 1.87 percent, said finance adviser James Gollahon. The term of the loan will be reduced from 20 years to 15 years.
The interest rate on the current loan is 3.05 percent. The original loan was higher, but some funds were repaid.
Commissioners approved the refinancing agreement Monday and the loan is expected to close later this week.
Gollahon estimated in May that the city could expect a refinancing bid of 2.35 percent. All five bids were lower.
A drawback of the new loan is a prepayment penalty starting at 4 percent and reducing to zero after seven years. The 2018 loan had no prepayment penalty.
“It’s not as good as what you had, but at that interest rate, I don’t think you’re going to lose much,” Gollahon said.
Police officers will begin moving next week into the new $7 million police headquarters on seven acres at the southwest corner of U.S. 301 and County Road 462 West.
It will be the first permanent home for the department since an electrical fire severely damaged the former Huey Street station in October 2018.
The station is one of several major Wildwood projects.
A $1.9-million improvement project at Martin Luther King Jr. Park is substantially complete. The Oxford water treatment plant became operational this spring.
