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Sewer Authority Refinance Saves $1 Million

SANATOGA PA – Rate-paying customers of the Lower Pottsgrove Sewer Authority, a group comprised of a majority of property owners in the township, could benefit from its proposed re-financing of a 2011 sewer bond that expected to save slightly more than $1 million in interest costs and fees, the Board of Commissioners learned Thursday (July 23, 2015).

There’s no promise that sewer rates will go down anytime soon, if at all, as a result. But the plan to take advantage of savings offered by still-available, low-cost money was music to commissioners’ ears. They are being asked to guarantee the township will repay the loan if, for any reason, the authority can’t.

Financing representative Jeff Calhoun of Flourtown PA-based Calhoun Baker Inc., with encouragement from township Solicitor Robert Brant, explained his firm had access to “a pool of money” from which the authority would borrow at what generally amounted to a 40-percent discount on the bonding cost and accompanying fees. Brant said he worked with clients who previously relied on and were satisfied with Calhoun Baker’s efforts.

The township enjoys a AA credit rating with Standard and Poor’s, according to Lucien Calhoun, also of the firm. An earlier conference call on the township’s rating bolstered lenders’ confidence, he added.

The re-financing was approved by the authority itself during its July 13 (Monday) meeting, Manager Ed Wagner reported. Commissioners likely will be asked to vote on the guarantee during their second meeting of August, with the deal scheduled to close ion April 2016 when the outstanding note can be called.

Related (to the Lower Pottsgrove Board of Commissioners’ July 23 meeting):

Photo from Google Images

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