Politics & Government
City Eyes $7.73 Million Refinance Deal
Bond issue will fund needed capital projects and refinance two bonds from 2004 at a better rate.

Easton plans to refinance two bonds totaling approximately $6.65 million and borrow an additional $1.08 million , officials said Tuesday.
The new bond aims to lower the interest rate of the two it will replace, going from 7.725 percent to a target of a 3.347 percent blended rate.
The terms of the new bond issue will be similar or shorter than the old deal, enabling the city to rid itself of the debt in a similar time frame, told city council at its workshop meeting.
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Gary Pulcini, of Valco Capital Ltd., the city's financial consulting service, said the bond will be put to auction after the city officially passes the ordinance directing the transaction to go forward, likely in late September. Having financial companies bid on the loan deal will ensure the city gets the best rate, he said.
“If someone says you could have done better, the answer is, 'why didn't you bid?'” Pulcini said. “If rates go up, then we'll put the auction on hold.”
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The two sets of bonds to be replaced date from 2004, Heagele said. One set was refinanced bonds from 1992 and 1998, and the other paid for capital needs of the time, such as a ladder truck for the fire department.
The additional $30,000 attached to the current capital needs bond will pay for the fees attached to that part of the loan.
“It does cost us money to do this,” Heagele said. “It's not like it's free money.”
Still, Heagele said the move makes financial sense, because the lower interest rate will save the city far more than the one-time fees in the long run.
In addition, the city is set to save $119,000 in payments the first year and $1,200 the second under the anticipated deal due to the blended interest rate, which runs from 0.7 to 4.6 percent.
The first reading of the bond issue ordinance is expected at city council's Aug. 10 meeting.