ROSEBORO — After months of discussion, the town’s commissioners have signed a resolution that allows them to refinance the Sewer General Obligation Bond and Senior Center loan, with the intentions of saving the town nearly $300,000, ultimately lowering the interest rate and shortening the terms.
During a special called meeting last Friday afternoon, the commissioners signed the resolution authorizing the refinancing of two of the town’s largest debt items — the water and sewer plant and senior center. Discussion of the refinancing was originally presented by commissioner Cary Holland during a meeting last Fall.
“Lowering the interest rates on both loans and shortening the terms will save the Town of Roseboro approximately $300,000, when compared to the interest due on the USDA loans,” town clerk Tony Blalock said following Friday’s meeting. “We are very pleased at the interest rates offered by BB&T and the savings this refunding will generate for the citizens of Roseboro.”
In November, the commissioners submitted paperwork to the Local Government Commission, requesting the LGC’s permission to apply for a loan to refinance the water and sewer plant and the center, a total savings of $300,000. According to the resolution, the town of Roseboro received necessary approval from the LGC on Aug. 4 to proceed with the refinancing.
The town will finance the water and sewer project through Branch Banking and Trust in the amount of $870,500.
As stated in the resolution, the town desires to refinance the 1995 USDA Sewer General Obligation Bond for a term not to exceed 10 years at a rate of 2.88 percent and an installment purchase agreement. This is slightly different than the town’s proposal that was submitted to the LGC.
In the original proposal, the board was looking at refinancing the water and sewer plant at an annual percentage rate of 3.03 percent for 12 years, after making an advance payment of $35,000, bringing the refinancing payoff total to $886,816. The annual payment with this loan option will be $88,241.28, about $18,000 more than the annual payment the town is making on the water and sewer plant currently.
The senior center, with a payoff amount of $30,822.28, will be refinanced at a rate of 2.410 percent for seven years. The annual payment of the senior center will only increase about $500 to $4,837, to be paid each August.
“We have to do what is best for the town concerning the water and sewer plant and senior center,” Holland stated concerning the refinancing during an earlier meeting.
The board encountered a setback at the beginning of November, when the LGC informed Holland that the board must apply through them for permission regarding the type of loan and loan terms the town could enter into. Holland, who was made the authorized agent to deal with LGC, said there would be a $1,250 application fee for each of the applications the town processed.
In addition to refinancing the water and sewer plant and senior center, the town is refinancing a fire truck through First Citizens Bank at 2.15 percent for seven years. In doing so, the town would see an increase in their annual payment, from $19,545.00 to $32,825.40, but the amount would be paid off in seven years rather than the 15 years it is currently financed for.
Prior to earlier meetings, Holland had presented several options for refinancing the water and sewer plant. The initial debate over the plant came when board members couldn’t decide if they wanted to refinance the plant for 10 or 12 years and if they wanted to make an advance payment of $70,500. Also discussed was the idea of beginning the new payments Jan. 2015.
During meetings held last, commissioners Alice Butler and Anthony Bennett made their disapproval with the 10-year loan, citing it as an option that would not benefit the town, but possible set the town back. Both commissioners voted to approve the resolution during Friday’s special meeting.
Butler stated earlier she didn’t feel the 10-year loan was an option the town should consider. It was an option, she originally said, she couldn’t vote for. Bennett said he just felt the town would be backed into a corner if they went with the 10-year loan. This would increase the town’s annual payment to $98,000.
Reach Kristy D. Carter at 910-592-8137, ext. 2588. Follow us on Twitter at @SampsonInd. Like us on Facebook.