CHAMPAIGN – The city saved $684,000 Tuesday by refinancing two older bond issues at a much lower interest rate.

The city council approved refinancing 1998 and 1999 bond issues totaling $9.1 million. The old bonds had an interest rate of 4 percent, which has been reduced to 2.2 percent with the new bonds.

The new tax-free bonds were sold Tuesday to Stifel Nicolaus & Co. Inc. of St. Louis, which also has a Champaign office. The new bonds will be paid off in 2016, the same payoff date as the old bonds.

Phil McKenna, president of Kane, McKenna Capital Inc., of Chicago told council members the city has an excellent bond rating of AAA from Fitch and Aa1 from Moody's.

"That's because of the stability of the government here," he said. "You have set aside reserves for times like now. It's because of the fact that you do lots of planning and that you show flexibility when you have to adjust your budget ... It's a clear signal the investment community appreciates what you've done."

Council members also approved 8-1 an intergovernmental agreement accepting jurisdiction of 3.25 miles of Staley Road from Springfield Avenue to Illinois 150 from the state. The state will provide $3 million to offset future costs of maintaining that section of Staley Road.

Marci Dodds voted no.

Dodds said the city needs to concentrate on upgrading existing arterial roads on the fringe of the city.

New council members David Johnson, District 5; Kyle Harrison, District 3; and William Kyles, District 1; and veterans Michael La Due, District 2; and Marci Dodds, District 4, were sworn in to 4-year terms.