ARLINGTON – The city of Arlington plans to refinance two bonds and a promissory note for the Graafstra property that could save the city an estimated $1.1 million, while setting wheels in motion for a new fire station.

The City Council Monday approved moving forward to issue about $7.5 million between the limited tax general obligation bonds at bargain-basement interest rates, and repay the promissory note on city-owned property key to Arlington’s future.

“To get lower interest rates, that will save us money over the long-term life of the bonds,” Finance Director Kristin Garcia said.

Bond underwriter Piper Sandler Cos. and bond counsel Foster Garvey will help the city process the bond sale. They have assisted the city with bond financing transactions before.

Public finance vice president Justin Monwai with Piper Sandler said bond market conditions have never been better.

“We are at historical lows, and not just historical lows, but all-time lows right now,” Monwai said.

For example, the 20-year interest rate on AAA-rated bonds was at 1.64% last year, and has fallen further to 1.41%.

By comparison, Arlington issued bonds in 2007 for the N. Olympic Avenue improvement project at a 4.17% interest rate. In 2010, the city issued refunding bonds to refinance improvements to Fire Station 46 and to buy 800 MHz public safety radios with a 3.67% interest rate. Also that year, the city – with a current “AA” bond rating – entered into a promissory note to buy the Graafstra property.

Proceeds from the bond sale will help design and build a new Fire Station 48 in the 18000 block of Airport Boulevard and merge Station 47 on the airport’s east side into the same building, which provides administration and a basic life support unit for the fire department. However, the bulk of that financing will come through a new 20-year low-interest bond the City Council will discuss on Monday, which drew interest during a recent request for proposals, city officials said. The current fire station is in leased space and needs to vacate by 2021.

The refunded bonds will be priced on March 17, with the closing set for April 1.