Town will seek better bond rate

Town will
seek better
bond rate
BY DAVE BENJAMIN
Staff Writer

MANALAPAN — In the interest of saving taxpayers money, the Township Committee passed three resolutions at its Sept. 10 meeting.

"About a week-and-a-half ago I distributed a memo outlining the subject of the issuance of permanent bonds, about $8 million worth of outstanding temporary debt that the township has," said Bob Casey, acting business administrator. "There has been extensive discussion with [Phil Del Turco, chief financial officer; John Cantalupo, bond counsel; and Tom Fallon, auditor] as to the possibility of capturing the lower interest rates, which are currently prevalent."

Casey explained that by taking the current temporary debt which is funded at an annual basis and going for a longer term, 10 years, the township could save money.

"Given the current market conditions and the rising interest rates, particularly on the treasury bonds, etc., it is their recommendation, that I concur in, that the township take advantage of the current window of opportunity to go for permanent debt for 10 years for $8 million and tie in the lower interest rates," said Casey. "In that respect we have bonds that are due on Oct. 2, so that it is important that we do it tonight, this month."

Del Turco, Cantalupo and Fallon then explained the technical aspects of making the change.

Committeeman Bill Scherer asked for the current rates and was told the current rate was 1.5 percent, with June hitting a historic low of 0.83 percent.

The interest rates have crept back up and will continue to creep up over the next few years, Cantalupo said.

"If we finance this to a 10-year bond in the next three months, will it be about 3 percent?," Scherer asked.

"Closer to the 3.4 to 3.5 [percent]," Cantalupo said. "Given that rates are very low right now, we feel it’s a better time to lock in long term for 10 years."

It was also explained that costs would be reduced if the township takes advantage of the low rates now.

Three resolutions were passed by committee members.

The first resolution, approved by a 5-0 vote, provides for the combination of certain issues of general improvement bonds of Manalapan, into a single issue of bonds, aggregating not to exceed $8,150,000 in principal amount.

The next resolution, approved, 5-0, provides for the combination of certain issues of open space bonds of Manalapan, into a single issue of bonds aggregating not to exceed $1,564,000 in principal amount.

The last resolution, approved by a vote of 4-1, with Committeewoman Mary Cozzolino voting no, determines the form and other details of the offering of $9,714,000 general obligation bonds consisting of: $8,150,000 general improvement bonds, series 2003 and $1,564,000 open space bonds, series 2003 of Manalapan and providing for their sale and determining certain matters.