SMETHPORT – McKean County will save over $205,000 by refinancing loans from 2007.
Acting at a special meeting Thursday, County Commissioners Joe DeMott, Al Pingie and Cliff Lane approved a “debt ordinance” that calls for the issuance of $3,590,000 in new bonds to be repaid over an 11-year period.
The new loan pays off three bonds issued in 2007 for such projects as the courthouse renovation and the replacement of the Galico Bridge in Keating Township.
Falling interest rates prompted the commissioners to consider refinancing the 2007 bonds to save interest payments.
Financial advisers previously told the commissioners that refinancing is not worth the expense unless it results in a net savings of at least 2 percent. It appears the county will save about 6 percent, according to data presented to the commissioners.
By refinancing, the county is expected to save $205,202.08 in interest costs over an 11-year period. Most of the savings will occur this year. The county is expected to save $176,082.08 in interest costs this year.
The commissioners said this savings would be seen in the capital reserve fund, which is tapped to pay interest and principal on bonds for construction projects.
Speakers at the 27-minute meeting Thursday in the county courthouse included Thomas Lynch, a Pittsburgh attorney who serves as the county’s bond counsel, and Michael McCaig, the managing director of the Public Finance Division for PNC Capital Markets in Pittsburgh.
Lynch, a member of the law firm of Lynch and Lynch, reviewed a 26-page document that includes the “debt ordinance” adopted Thursday by the commissioners.
He pointed out that the annual interest rates over the 11-year period of the new bond range from less than half of 1 percent to less than 3 percent.
See full article by purchasing the June 29 edition of The Kane Republican.
McKean County Commissioners
When: Monday, July 9
Time: 10 a.m.
Where: County Courthouse, Smethport