Refinance savings better than expected | News, Sports, Jobs
Altoona can save significantly more than expected last month by refinancing its existing qualifying debt, city council learned this week.
Last month, the projected savings were $ 379,000, based on a better interest rate expected on $ 17 million borrowed in 2015, 2016 and 2019.
Since then, a closer look has shown that last year’s loans were also eligible, increasing the amount to be refinanced to $ 28 million, which could save around $ 560,000.
Refinancing is expected to save around 2% of the base amount, according to City Manager Omar Strohm.
“Whenever we can save taxpayer money, this is the goal” said City Councilor Dave Butterbaugh.
Concord Public Finance advised the city on the matter.
Refinancing could be done through a bank loan or a publicly announced bond, Eckert Seamans legal adviser Jens Damgaard said.
The city council introduced an ordinance for refinancing with empty spaces to accommodate, regardless of the loan option chosen by officials.
The Council also introduced orders pledging its financial resources to secure the repayment of a pair of Pennvest loans to the Altoona Water Authority.
A loan of $ 24.5 million would finance the renovation of the Bellwood dam and another of $ 11.12 million would allow the water treatment plant downstream of the dam to be renovated.
Loans are 20 years at 1%.
The total interest for the dam loan is $ 2.54 million.
The total interest on the factory loan is $ 1.15 million.
The authority actually needs more money to carry out the projects than what would be provided by these loans and asks for this additional money from Pennvest.
He needs more money as offers for both jobs have been higher than estimated, due to post-COVID labor and material shortages, pent-up demand from post-COVID contractors and lots of government funding available.
Mirror staff writer William Kibler is at 814-949-7038.