MANALAPAN — When debt service savings are created by lower available interest rates on municipal bonds, towns can save money by refinancing their outstanding debt.
Such was the case in Manalapan recently.
"The township felt it could take advantage of the lower rates and refinance these bonds with the Monmouth County Improvement Authority (MCIA)," said Tara Lovrich, assistant business administrator. "We were successful with savings of over $72,000."
Lovrich said municipal officials wanted to save money by taking advantage of the new rates.
For the past 10 years, the MCIA has completed pooled financing to assist Monmouth County municipalities finance Bond Anticipation Notes and unfunded ordinances.
The first of these annual transactions, which Manalapan and six other Monmouth County municipalities participated in, occurred in 1993. Recently, the MCIA identified the opportunity to refund, or refinance, the 1993 bonds, so as to bring about a decrease in the cost of the township’s debt service.
On Jan. 28, the refunding bonds were priced and sold, resulting in a savings of $72,872 for the township. The township’s portion of the bond issue generated 3.936 percent, the present value savings, according to information provided by municipal officials.
Members of the Township Committee met on Jan 29 and approved a resolution authorizing the refinancing by a vote of 4-0. Committeewoman Mary Cozzolino was not present for the vote.
The resolution calls for the township to sell a maximum of $1,885,000 General Obligation Refunding Bonds, series 2003, to the MCIA in accordance with the terms of a Bond Purchase Agreement between the township and the MCIA.