The town of Jaffrey will save $142,000 this year alone after agreeing to refinance a $6.4 million bond.
The USDA Rural Development Bond, taken out on April 3, 2012, was used to pay for the town’s wastewater treatment plant. The interest rate will be dropped from 3.38 percent to somewhere between 2.5 and 2.68 percent, according to Town Manager Dave Caron.
“This is the largest single bond the town has right now,” said Caron. “This is a great opportunity for the town to save some money.”
Caron said the original bond was for 24 years and that it was one of the highest interest rates the town had on a bond. The Select Board held a public hearing on the refinancing on Monday.
Caron said the town will save immediately by refinancing with New Hampshire Municipal Bond Bank, but will also save money in future years. Under current projections, Caron said the town will save about $240,000 over the life of the bond, which would remain at 20 years.
Caron said there are two repayment options: level payments or payments that would begin higher and then decrease every year. Under the latter scenario, Caron said the town would save more money.
Since the budget is already determined this year, the town will put the $142,000 in savings.
“The Select Board is thinking of applying the money to other bonds the town has taken out,” said Caron. “That, or applying the money to the fund balance.”
Caron said that refinancing this bond will put it inline with the interest rates on other bonds taken out by the town.
The town hopes to have the bond refinanced by July 12, according to Caron, but it could be completed by June 28.
Nicholas Handy can be reached at 924-7172 ext. 235 or nhandy@ledgertranscript.com. He is also on Twitter @nhandyMLT.