City will save with refinancing debt
City Council on Monday introduced an ordinance calling for the refinancing of $9.6 million in debt to save a net $290,000 over eight years.
The city plans to borrow the money from Webster Public Finance Corp. at 1.9 percent interest.
“It’s a very good rate,” said financial adviser Chris Gibbons of Concord Public Finance of Lancaster.
The amount to be saved exceeds by $90,000 the minimum savings the city set as the trigger for refinancing, Gibbons said.
“Very nice,” said Councilman Dave Butterbaugh.
The city will refinance a series of 2014 bonds, originally $8.9 million, and a 2015 loan, originally $4.8 million.
The bulk of the savings will be realized in the last two years, Gibbons said.
The term of the new loan will be the same as the remaining term of the existing debt, according to Gibbons.
The interest level for the new loan is virtually “locked in,” said Jens Damgaard of Rhoads & Sinon in Harrisburg, the city’s bond counsel.
The financial advisers determined that for refinancing now, a loan was preferable to a new bond issue.
Mirror Staff Writer William Kibler is at 949-7038.