Three general obligation bonds the city of Picayune is paying on have been refinanced, which will save the city about half of a million dollars throughout the life of the loan.

Picayune City Clerk Amber Hinton said the bonds were taken out to conduct improvement work throughout the city limits.

One of the bonds, a $3.5 million special obligation bond taken out in 2004, was used to conduct improvements to Friendship Park, Hinton said. The bond is being paid back using a one cent tourism sales tax assessed to all prepared food and hotel room purchases, Hinton said.

Another bond taken out in 2004 was a general obligation bond totaling $1.5 million that was used to repair streets and erect city buildings.

A public improvement bond was taken out in 2005 totaling $1.5 million, which was also used to erect city buildings, improve the water and sewer system and conduct street improvements.

That money also constructed the evidence room for the police department, Hinton said.

The interest rates on those bonds was running between 3.5 to 4 percent, said Troy Johnston with Butler Snow.

Last week the city was approved to refinance all three bonds a rate of 2 percent.

“We’ve actually been eyeing this for some time,” Hinton said. “There was a dollar savings opportunity so we jumped on it.”

Johnston said the city will save about $50,000 a year in interest payments, or $580,000 over the remaining life of the bonds.

The last of the three bonds is set to mature in 2024.

“We’re not extending any term on any of those bonds,” Hinton said.

While the interest rate will drop to 2 percent with this refinance, that rate will last until 2021.

Hinton said in the year 2021 the rate will increase slightly to 2.25 percent, and in 2022 it will increase again to 2.5 percent. Finally, in 2024 the rate will be 2.75 percent.

The city will not face any penalties for refinancing these bonds, Hinton said.