Officials look to refinance debt
Richland officials are going to save taxpayers about one and a half times as much on a bond refinancing than they would have had they done the refinancing several months ago.
Richland Manager Dean Bastianini said officials are looking at refinancing $6.4 million of debt. If approved at an upcoming supervisors meeting, the savings to the township will be an estimated 3.394 percent. While that number seems small, it balances out to roughly $218,000 in savings.
The refinancing would include three separate bond issues, expiring in 2007, 2012 and 2022, Bastianini said. While the money would be refinanced, those maturity rates would stay the same, he said.
"Rates right now are at a historical low," Bastianini said. "So, this seems to be prudent."
Supervisors concur with Bastianini's recommendation.
"If we're interested in refinancing, it seems to be a no-brainer," said board Chairman Herb Dankmyer.
Bastianini also said now would be a good time to issue bonds for upcoming projects to take advantage of the rates.
By law, the board could issue bonds now at current rates and put that money away for three years before spending it, so long as the interest earned on the money does not exceed the interest paid in debt service.
"If the supervisors were interested in putting the financing in place for (future) projects as well, now would be the time to do that," Bastianini said. "There would be $25,000 in additional savings to combine (the refinancing and new debt) if you want to do it. The time seems to be right, and there are benefits to combining."
Projects on the horizon for the Richland include a new municipal building and police station, as well as various sewer projects throughout the township.
Bastianini said he is preparing for the refinancing.
"They wanted me to lay the groundwork for the refinancing, and they wanted me to crunch the numbers for a new money issue," Bastianini said. "I'm getting firm proposals from Mellon Financial."
The next meeting of the Richland board of supervisors is at 7 p.m. Wednesday at the municipal building, 4011 Dickey Road.