Loan Refinance For Municipal Project In Morris County Will Save Taxpayers $2 Million

Local taxpayers will be saved about $2 million over the next 14 years, thanks to a refinance by the Morris County Improvement Authority. The MCIA has cut Lincoln Park’s interest rates in half on the refinancing of the borough’s original 2009 bonding to finance a municipal complex project.

On August 18, the MCIA completed an advance refunding of bonds that were issued to Lincoln Park for municipal projects in 2009. The projects called for $20.1 million in borrowing at a 4.09 percent interest rate. The refinanced deal calls for the remaining $15.5 million still owed on the original bonding to be repaid at 1.91 percent, or less than half of the original interest rate, which will save taxpayers over the remaining repayment period.

“This will result in a pure budgetary savings of $1.9 million in interest payments that will directly benefit residents of Lincoln Park,’’ said Morris County Freeholder Deborah Smith, who is the county governing board’s liaison to the MCIA.

In 2009, MCIA issued $20.1 million of Morris County guaranteed bonds to the borough, which allowed Lincoln Park to finance construction and renovation of municipal buildings, and initiate other capital projects. These bonds, which were set to mature on or about March 15, 2020, were eligible to be refunded at the option of MCIA or the borough. Since the low tax-exempt interest rate is still in effect, the decision was made to refund the Lincoln Park bonds for the benefit of taxpayers over the long run.

“This is yet another demonstration of the value of the Authority to Morris County’s towns, school districts, and agencies-- directly benefitting their constituents--to be able to tap into the county’s top-ranked Triple A bond rating for the best possible borrowing options and financing of capital projects,’’ Smith added.

MCIA, established in 2002 by the Morris County Board of Freeholders, has been providing municipalities, school districts, and the county itself with innovative and cost-effective means for funding projects while saving taxpayers money. By using the MCIA and the county’s AAA Bond rating to finance municipal projects, local officials have been able to spend fewer dollars and thereby reduce the property tax burden on their residents. Since 2004, low-interest loans totaling $32 million have been facilitated by the MCIA for 24 school districts and five municipalities, enabling them to secure funding for equipment ranging from school buses, vans, and public works vehicles to computers.

Image via Jericho, Wikipedia, used under Creative Commons.