Northampton approves bond sale
Northampton Borough Council on Thursday unanimously approved the sale of $2.4 million in tax-free municipal bonds.
The bonds will pay for several projects, including street resurfacing and construction and property acquisition.
Helped by an A-2 bond rating, the borough is projected to pay only 1.9 percent interest, which is considered to be very favorable, said Borough Manager Gene Zarayko.
Labeled as "a wrap around bond," the new municipal bond will pay off an existing bond issue. The existing bond has one year of debt remaining at $300,000.
Zarayko said the "new money" is $1.4 million which, when added to the existing debt and auxiliary fees, equals $2.4 million.
Gary A. Pulcini of Ligonier, Westmoreland County, represented Valco Capital Ltd. financial consulting services for the bond sale. Attorney Thomas F. Smida, of Harrisburg, served as counsel for the borough.
Pulcini said the borough has a three-year window to draw down the funds for the projects it has on the table.
"You have three years to spend your new money," he said.
According to council members and Zarayko, the municipal bonds will pay for repaving sections of Laubach Avenue and the lower end of Main Street which currently has a concrete surface. Funds will be used to construct an addition to the fire station and pay for the uptown Main Street lot the borough just purchased.
"It worked out very well," Zarayko said. Earlier the borough sought to finance the above projects and pay off the existing debt with a bank loan, but such plans failed to materialize.
Borough officials see no adverse impact the bond issue will have with residents paying real estate taxes.