Olathe water saves more than $2 million by refinancing

The Olathe water department will save just over $2 million by refinancing the project to install usage meters that allow automated reading.

The city in 2009 entered a lease-purchase agreement for the equipment with Bank of America at an interest rate of 5.4 percent. Payments began in May this year and the final payment was to be in 2023. But with interest rates falling, the city received several offers to refinance.

This week the city council agreed to the best offer, also from Bank of America, to reduce the interest rate to 2.35 percent. That will save the city $2,014,437 and the final payment will be two years earlier, in 2021.

The money will stay in the water department, which is an enterprise fund.