Plum Borough's credit rating bumped to A+
Plum Borough expects to glean about $1.6 million by refinancing a $7 million bond issue.
The planned refinancing has resulted in more good news — Standard & Poor's rating service has upgraded the borough's credit rating from an ‘A' to an ‘A-plus.'
Councilman Michael Dell, finance committee chairman, said the credit rating review occurred as a result of members' decision to refinance a bond issue from 2010.
Officials plan to use the proceeds to construct a new building to house a station for the Renton Volunteer Fire Department and separate space for Plum Emergency Medical Service.
Also, some of the money is set to go toward infrastructure and connecting a road that is to be named Old Mine Road from Renton to Old Leechburg roads.
“Since fiscal 2008, (borough) finances have rebounded, in our opinion, nicely, producing four consecutive general fund surpluses at levels we consider very strong,” according to the Standard & Poor's summary.
The borough's general fund surplus at the end of 2009 was $375,342. The number increased to $664,197 in 2010, and $1.15 million in 2011. The borough projected a $1.08 million surplus in 2012. Dell said the actual amount will be in the audit that is expected soon.
Also, the borough projected the 2013 general fund surplus at $972,805.
Dell said the surpluses were accomplished through closing the police dispatch center in 2010, changing employees' health benefit coverage in 2011 to a high-deductible plan and working with employees on a sick day giveback, plus other steps.
“We've cut over $1 million over the last four years,” Manager Michael Thomas said.
Dell thanked borough workers for the surpluses and the subsequent credit upgrading.
“It was a team effort with everyone helping,” Dell said.
“All the employees should be applauded for this.”
The borough has about 65 employees, a reduction from 72 in 2004. Dell said the new rating will have positive effects for the borough.
“With a higher credit rating, the borough can get a lower interest rate when borrowing money,” Dell said.
“It means thousands and thousands of dollars in interest savings to the borough over 30 years,” he added, referring to the life of the borough's debt.
Karen Zapf is a staff writer for Trib Total Media. She can be reached at 412-856-7400 ext. 8753 or email@example.com.