Refinance savings better than hoped
City could save $560,000
Altoona can save significantly more than predicted last month by refinancing its eligible existing debt, City Council learned this week.
Last month, projected savings were $379,000, based on hoped-for better interest on $17 million borrowed in 2015, 2016 and 2019.
Since then, a closer examination showed that loans from last year were also eligible, increasing the amount to be refinanced to $28 million — potentially saving about $560,000.
The expectation is that refinancing will save about 2 percent of the base amount, according to City Manager Omar Strohm.
“Any time we can save taxpayer money, that’s the goal,” said Councilman Dave Butterbaugh.
Concord Public Finance has been advising the city on the matter.
The refinancing could be done through a bank loan or a bond advertised to the public, said bond counsel Jens Damgaard of Eckert Seamans.
City Council introduced an ordinance for the refinancing with blank spaces to accommodate, whichever loan option officials ultimately pick.
Council also introduced ordinances pledging its financial resources to guarantee repayment on a pair of Pennvest loans to the Altoona Water Authority.
One loan for $24.5 million would pay for renovation of the Bellwood Dam and one for $11.12 million would pay for renovation of the water treatment plant below the dam.
The loans are for 20 years at 1 percent.
Total interest for the dam loan is $2.54 million.
Total interest for the plant loan is $1.15 million.
The authority actually needs more money to do the projects than would be provided by those loans and is asking for that additional money from Pennvest.
It needs more money because bids for both jobs came in higher than estimates, due to post-COVID shortages of labor and materials, pent-up post-COVID demand for contractors and lots of available government funding.
Mirror Staff Writer William Kibler is at 814-949-7038.