Elm Grove saves $1M on debt

Refinancing will save Elm Grove more than $1 million in interest costs in paying back stormwater management-related debt. Elm Grove sent the $9.45 million bid out the day after interest rates hit historic lows.

Finance Committee member Jack Nelson said he expected low rates, but nothing like the 1.86 percent financing the village got. It took the expecting savings from about $475,000 to more than $1 million.

The extra savings were such a shock and such a boon for the village, Nelson jokingly suggested the Village Board start the wave after approving the bid.

"It's like free money," he said after the meeting.

Municipal governments rely heavily on borrowing money to complete infrastructure projects, particularly in small, residential communities like Elm Grove. A strong credit rating and history has allowed Elm Grove to save hundreds of thousands of dollars to finance projects that couldn't be paid for without borrowing.

Getting low rates means paying off that debt faster and keeping the proportion of debt to income at manageable levels. The better a village is at doing that, the better the credit score which equals the kind of leverage to get such low rates.