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City pays off Saghalie Park bond, saves $100,000

By ERICA HALL

The Mirror

Federal Way’s early payoff of the capital bond to help build Saghalie Park is expected to save about $100,000 in interest and will free up the money used for debt service to pay much of the new City Hall mortgage, officials said.

Because the city collected $740,000 more in real estate excise taxes than expected this year, city finance officials recommended using the excess to pay off the remainder of the bond debt. The City Council agreed.

The city issued the $2.4 million bond in 1993 to pay for construction of the soccer field near Saghalie Middle School on 19th Avenue Southwest. The 15-year bond was set to mature in 2005, and interest accrued at 5.6 percent.

The city’s debt service payments were $230,000 a year in interest and principal, city finance director Iwen Wang explained. By paying the bond off four years ahead of schedule, the city is saving about $100,000 in interest, she said.

Paying off the bond also frees up that $230,000 a year, which city officials want to use with some additional real estate excise tax revenue to pay the $380,000 City Hall mortgage.

Using capital revenue to pay the mortgage would in turn free up money in the operating budget to help close the city’s almost $3 million annual budget deficit, officials said.

Staff writer Erica Hall: 925-5565, ehall@fedwaymirror.com

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