The city of Columbus is making plans to pay off bonds for a Cummins improvement project early, saving more than $2.5 million.
According to a report from the city’s financial advisor, Bruce Donaldson with Barnes
& Thornburg, the city set up a special taxing unit for Cummins Engine Plant in 2009, with the money paid in taxes going to pay off bonds issued for improvements to the plant and its facilities. However, the property taxes coming in have exceeded the bond payments over the years, leaving more than $20 million in the unit’s fund.
The bonds are not due to be paid off until 2031, which would cost the city about $17.5 million. However, paying the bonds off early would give the city a 4 percent discount. The cost to pay off the bonds in February, according to the financial advisors, would be about $15 million.
The proposal was approved this week by the Columbus Redevelopment Commission, but because of a $500,000 spending limit on the commission, the spending must be approved by the Columbus City Council. The city also has to get approval from Cummins to use those excess funds to pay off the bonds early.