STAFFORD – The Township Council is working on cutting down their yearly bond payments, which they hope will save half a million dollars over the lifetime of the bond.
Municipalities often bond for projects. They borrow the money and then pay it back over a number of years. Every so often, bonds come up to a point where the municipality can refinance them, similar to refinancing a house to get a lower monthly mortgage.
The total amount of debt the township has is approximately $124 million. At one point, it had been as high as $170 million.
The debt service – the amount the township has to pay every year – is about $7-9 million, business administrator James Moran said.
The ordinance that was introduced would take $11.5 million of the total debt and seek a better percentage, he said. Not all of the township’s total debt is up able to be refinanced in this way.
Typically, getting a lower percentage can save $400,000 to $500,000 over the life of the bond, he said.
If the bids come in as higher than the township’s current rate, the Township Council is not forced into taking it, Moran said.