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CHAMPAIGN — In a move that would save the city about $1.2 million, city council members gave initial approval for refinancing Build America Bonds issued by the city following the 2008 financial crisis.

It’s a small drop in the bucket, but the money could go toward stormwater-retention projects like the one planned for the Garden Hills neighborhood. The bonds were used for improvements to the Second Street reach of the Boneyard Creek and the John and Washington streets watershed.

“At present value, it would be a savings of about $1.2 million, and this would be well over the minimum standard for refunding bonds per our debt policy,” said city Finance Director Kay Nees.

But the savings aren’t the only reason why refinancing is a good idea. The federal subsidy on interest costs for Build America Bonds, initially at 35 percent, has fallen to 5.9 percent.

“By refunding it, we reduce risk of further reduction or removal of subsidies because we would no longer be relying on the subsidy,” Nees said.

As for fears of what a future recession could mean for refinancing the bonds, Nees said the Federal Reserve’s inclination to lower interest rates after a recession would mean even more savings for the city.

The deal would be negotiated with underwriters the city is currently seeking. To make sure the city gets the savings it foresees, the maximum principal can’t exceed $22.8 million, interest rates can’t go higher than 5.5 percent and the city “won’t move forward” unless it gets at least 3 percent savings.

Council member Vanna Pianfetti said the effort is a testament to the city’s “fiscal responsibility.”

“Sometimes, it’s easy to overlook something you might think is insignificant,” Pianfetti said. “But it does have an impact because then we can be presented with the opportunity to see how it can make an overall difference in what we want to do. Every bit of savings is good.”