BROWNSBURG — Tax payers here will have a little more in their pockets after the town council approved an issuance of refunding bonds for the municipal complex that is expected to save $2.2 million over the life of the lease, which runs until 2025.
The municipal complex refers to the buildings that make up town hall, the police station, and the fleet maintenance facility. The bonds were originally issued in 2005 with a floating rate between 4 and 4.5 percent interest. The low bid came via PNC Bank, which will bring the interest rate down to 1.809 percent and is projected to save around $180,000 annually from this decision.
Town Manager Grant Kleinhenz effused praise for the Brownsburg Municipal Building Corporation and the council for seeing an advantageous market and seizing the opportunity to save money for residents and the town.
“It was a condition of the market, and the town council, as well as the building corporation were willing to go through some of the machinations of the analysis and the bidding to get this done,” he said.
“Typically what happens is interest rates go down in general,” he explained of the process, “and (the town) has financial analysts that look at those bond issues. When they ran it, it was fairly clear we could save a considerable sum of money.”
Under the old rate, the town was paying around $1.3 million annually over two payments.
“This is specifically a bond issue that’s currently on everyone’s tax bill included in the ‘town rate,’” he said. “That rate will be adjusted, and the town will collect less money annually for that debt service. It will truly be a savings to the taxpayers.
“Now, some are at the cap so not everybody will save the exact amount, but the good news is that it’s a net savings to the tax payer. So when we pay that off in 2025, we will not need the 1.1 million again to pay those bonds off.”
The municipal complex wasn’t the only recent bond issue that will be saving the town money. Recently, the Brownsburg Fire Territory Building also went through a refunding process that will save the taxpayers.
“Over the life of that bond, which matures in 2014, their expected savings over that period will be $203,067.84,” Kleinhenz said. “It’s a condition of the market. The issue of that fire bond was 1.719 percent.”
Combined with the municipal complex deal, the annual savings are near $200,000.