For Immediate Release:

June 5, 2013

 

Loan program helps local governments

Improvement Authority helps keep expenses low

County guarantee saves $3.4 million with 2.5 percent interest rate

 

FREEHOLD, NJ – A Monmouth County township, a local authority and a school district that participated in the Monmouth County Improvement Authority’s recent pooled loan program saved a combined $3,484,714 by borrowing funds through the Monmouth County Improvement Authority (MCIA). That level of savings was possible because the county guaranteed the bonds.

 

“Monmouth County participants partaking in this bond sale see the value of using the MCIA to finance their debt,” said Freeholder Deputy Director Serena DiMaso, liaison to the MCIA. “In addition to receiving the county’s AAA bond rating that wins them the lowest possible interest rate on the loans, they receive more savings by pooling together and using the county guarantee rather than acquiring bond insurance individually.”

 

In fact, the Township of Wall and the Manasquan River Regional Sewerage Authority saw their debt service decreased significantly by participating in the tax-exempt financing through MCIA.

 

A factor that attributed to the savings is the tax-exempt bond market, which continues to experience some of the lowest rates in history. That combined with the county’s AAA bond rating netted a true interest cost of 2.725 percent, creating $3.2 million in savings.

 

The MICA has generated $150 million in savings since it was formed in 1986. In this latest pooled bond sale, each refinancing generated significant savings for the participating municipalities without extending the life of the loans. The MCIA is a county agency whose singular focus is on finding alternatives to traditional methods of public finance that generate savings for Monmouth County, its municipalities and other local government entities.

 

“I would urge municipalities that are not involved with the MCIA to use the county’s pooling power and funding power to keep expenses low,” DiMaso said. “We have programs every year. This is a great way to save money and keep our bills under the 2 percent cap.”

 

As part of this transaction, the MCIA issued bonds on behalf of the Howell Township Board of Education, refunding a prior taxable issue. The refinancing, at 1.61 percent interest, saves the township – and ultimately taxpayers – $513,589 over the life of the bonds. Almost half of the savings were generated by the county guarantee.

 

“Helping municipalities, school districts and other eligible agencies save money through the MCIA’s programs can go a long way toward helping local governments in those participating towns keep their taxes low,” said Al Rosenthal, chairman of the MCIA.  

 

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