SANATOGA PA – Lower Pottsgrove officials think they know a good deal when they hear one. So they have heeded the advice of bond counselors, and borrowed less money to upgrade the township sewer system and refinance existing debt in exchange for a better interest rate on the new loan.

Where those millions went

And they got unexpected kudos to boot.

The township Board of Commissioners voted unanimously and without comment Thursday (Feb. 17, 2011) to guarantee repayment of a $9.93 million bond sale conducted several weeks ago by the Sewer Authority. The money covers the $4.7 million cost of improving Lower Pottsgrove’s connection to the borough of Pottstown water treatment facility, as well as reducing the interest rate on $5.23 million the authority borrowed during 2005.

Board members Bruce Foltz and James Kaiser were absent and did not vote.

The authority talked with commissioners in October 2010 about selling bonds worth $13.76 million. Bond underwriters, however, reported the township would be charged less interest if it borrowed less than $10 million. No brainer, the authority agreed; it pared down its request, and enjoyed what was described as a “competitive sale” of its financial paper.

Better still, commissioners learned Thursday, bond and borrower rating service Standard and Poors told lenders that Lower Pottsgrove’s offering was an attractive deal. The township shows “consistent growth,” it said, with “stable reserves” and “conservative budget practices.” Ultimately, five different banks entered 32 bids to buy the bonds; the winner was UBS.

Related (to the Lower Pottsgrove Board of Commissioners’ Feb. 17 meeting):

• Township’s Reduced Bond Sale Rates High S&P Praise
• Lower Pottsgrove A Likely Co-Signer For Sewer Loans