CFO Reports Interest Rate on Borrowed Funds Lowest in Years

The borough managed to get an interest rate of less than 1 percent on its annual bond anticipation note, the lowest rate seen in years, according to the borough’s chief financial officer.

The borough takes part in short term bonding to fund its capital improvement projects. This year the borough managed to borrow $3,335,000 at the low interest rate of .0854 costing the borough $28,476 in interest to borrow the amount, Mike Kronyak, borough administrator and CFO explained. Kronyak commented it’s the lowest interest rate he has seen yet.

Kronyak explained the bond anticipation note allows the borough to pay back the funds over a 10-year pay schedule. Each year the borough pays off some of the debt, then rolls some of it over and may add on more if needed to cover of capital improvements projects not included in the operating budget from the previous year.

Kronyak said this year the borough paid $652,300 towards the debt and added on $634,000. The bond note went from $3,368,300, last year, to $3,335,000, this year.

The additional money borrowed this year absorbed the costs of projects that were done last year, he explained. Those projects include the repairs to the, sewer repairs, the and the , Kronyak said.

Also funds towards the repaving of parts of are included. Part of that project is being funded by a community development block grant in the amount of $81,000. The borough will cover the balance for this project which is slated to being this spring.