UPLAND - The Upland Finance and Economic Development Committee on Monday gave city staff the go ahead to prepare the refunding of two bonds issued by the now- defunct Upland Community Redevelopment Agency.

The city will still have to repay the bonds but at lower interest rates, therefore saving them an estimated $325,000 over the next 10 years starting in 2014.

"Any time you can take advantage of low interest rates to save as much as $300,000 to the general fund is a good idea," said Councilman Brendan Brandt.

The agency in 1998 issued a $25 million Tax Allocation Refunding Bonds, of which $14.235 million is outstanding with a 4.85 percent interest rate.

It issued another $15 million bond in 2003, of which $9.195 million is outstanding with a 4.75 percent interest rate.

Based on redevelopment dissolution laws, the savings amount would be split among taxing entities including San Bernardino County, school districts and the city's general fund.

The bonds will be presented to the city's Successor Agency, which was formed to oversee the dissolution of the city's redevelopment agency, later this month.

The state will then have 60 days to review the request.

Since Gov. Jerry Brown's decision to dismantle redevelopment agencies across the state, the Upland Successor Agency is now responsible for repaying the bonds.

However, the agency is allowed to refund existing bonds with the purpose of generating a debt service savings.

By issuing a refunding bond issue, the city could generate $1.9 million in debt service savings.

The city's financial consulting firm, Orange-based Urban Futures, monitors the financial market and alerts city staff to any possible savings, said City Manager Stephen Dunn.

"When they see if the market turns in our favor, they'll make recommendations and refund bonds if we're allowed to refund them," Dunn said. "Right now we have an opportunity to do that, saving the city some money, actually saving the general fund $300,000 over a 10-year period."