Cranberry Makes Moves to Refinance More Debt

Taking advantage of current low interest rates, Cranberry Township once again is .

Cranberry officials on Thursday authorized the township solicitor to work with PNC Capital Markets LLC and Dinsmore & Shohl LLP to begin the process of refinancing two sets of township bonds totaling about $12 million.

Included in that is a $9.9 million bond the township took out in 2008 for the construction of . The current interest rate for that loan is 3.87 percent. The other bond is a $1.1 million loan taken out in 2003 for expanding the public safety area inside the municipal building. The interest rate on that loan is 4.25 percent.

Michael Zubasic, a bond advisor with PNC, said refinancing would drop the loan interest rates to about 2.77 percent. This would yield a savings of about $450,000 for the township.

He added refinancing would not change repayment terms for the bonds, which are due to be paid off by 2025.

As for the money saved, Cranberry manager Jerry Andree said the $450,000 would funnel back into a capital improvements fund for the township, which includes future road improvements.

Cranberry’s board of supervisors are expected to vote Feb. 23 on whether to approve an ordinance allowing the refinancing.

Debts Pay Off

This isn’t the first time the township has saved money by taking advantage of low interest rates.

In September, the township . The bonds originally were used to expand the sewage treatment plant in 2001 and for construction of the in 2006.

The township typically looks at refinancing when there’s a chance of saving 2 percent or more on the debt amount. In this instance, the township saved about 10.4 percent.

Cranberry officials have credited the township’s strong bond rating --Moody’s Investor Services in August reconfirmed it at Aa2 -- with attracting bond investors. An Aa2 assignment allows the township to borrow money at the lowest possible interest rate.

The township in September also. Half of the $10 million will go toward the sewer and water line upgrades. The other $5 million will be used for a new public safety training facility for Cranberry’s firefighters, police officers and EMS workers.

The money also will go toward constructing a new building located near the Park Fire Station on Route 19 for as well as to renovate an empty space inside the that once housed Cranberry’s . The space now is used for storage.

Design plans for the vacant space already are moving forward. On Thursday, officials approved $19,000 for Wexford firm Ross, Schonder, Sterzinger, Cupcheck, PC to design a renovation for the former police headquarters as well as an upgrade the façade.

While an official designation for the space has yet to be determined, Andre said the remodeled space would be for public use.

For a full look at the refinancing presentation given at Thursday’s board of supervisors meeting—including the difference between “good” and “bad” debt and the township's unumployment rates compared the state and the nation—click on the PDF toward the right side of this page (below the photo).