Bozeman Public Safety Center

A city of Bozeman rendering shows the future Bozeman Public Safety Center. The project is about $7.3 million below budget. City officials said residents will see lower-than-expected taxes for the center's construction.

The Bozeman Public Safety Center project is about $7.3 million below budget, and city officials said residents will see lower-than-expected taxes for the center’s construction.

City staff presented the numbers to commissioners Monday as the last step before Bozeman closes on the bond sale to build the new center for city courts and emergency responders.

Bozeman voters approved the center’s $36.9 million bond last year. With interest, officials estimated that borrowing would bring the total debt to more than $54 million.

Instead, city staff said Monday that total debt would be $46.8 million.

“I don’t think I’ve seen a savings like this in my time on this commission, and I think it’s remarkable,” Mayor Cyndy Andrus said.

City Finance Director Kristin Donald said the price drop is because bond rates are down while Bozeman’s reputation as a low-risk borrower just got better.

The plan is still that Bozeman taxpayers will pay off the debt over 20 years. The typical Bozeman homeowner with a house assessed at $354,000 will pay roughly $71 toward the project in its first year.

Donald said after negotiations, the bonds sold with an overall 2.1% interest rate — nearly half of what the city estimated.

In August, Moody’s Investors Service upgraded the city’s bond rating to Aa1 — just below the credit rating company’s top tier. Donald said that brought more investors to the table.

The company said the high rating is largely due to Bozeman’s growing tax base and economy that’s expected to continue.

In the announcement, Moody’s analysts wrote Bozeman has strong financial management with a healthy reserve and the chance to collect more money if needed.

The company said Montana State University’s stabilizing presence also came to play in Bozeman’s rate.

The center will bring city police, courts and victim services under one roof on city land off North Rouse Avenue. It will also offer a new base for the firefighters working in the aging and over-crowded Rouse station close to downtown. The city plans to eventually sell the old station.

Commissioners once again thanked voters Monday for approving the project, which has been a city of Bozeman goal for more than a decade.

“This is your money,” Commissioner Terry Cunningham said. “We attempted to use it wisely.”

Katheryn Houghton can be reached at khoughton@dailychronicle.com or at 582-2628. Follow her on Twitter @K_Hought.

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