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Council OKs debt refinancing

The San Diego City Council on Tuesday authorized the sale of up to $185 million in bonds to refinance existing debt at more favorable interest rates.

The city plans to use the money to pay off a $103 million bond it issued last year for various deferred capital improvement projects that it is obligated to pay off. The rest will go to refinance the debt for the 1996 renovation of Qualcomm Stadium and for Mission Bay and Balboa Park improvements.

According to the report to the City Council, San Diego will save about $1 million annually by refinancing the outstanding debt.

The bonds will be secured through seven city-owned properties, in what’s called a leaseback financing transaction. The properties include San Diego Police Department headquarters, the Scripps Ranch Branch Library and three hotel properties on Mission Bay.

The City Council voted 7-1 to approve the bond refinancing.

Councilwoman Donna Frye cast the dissenting vote, arguing the city is issuing debt on property that’s already owned by the taxpayers without a public vote.

“This financing scheme defies logic,” she said.

Councilwoman Marti Emerald said the savings can be used elsewhere.

“That’s money we’ll be able to keep for other services, like keeping fire stations open,” Emerald said.