Munsey Park trustees are considering issuing a $5 million bond to finance capital projects around the village,
Trustee Partrick Hance said the new bond issue was needed because financing of a road improvement plan begun in 2007 only funded a portion of the road repairs needed by the village.
Hance and Deputy Mayor John Lippmann said the village has been using CHIP grants from the state to help fund needed repairs, but it has not been enough to fund some of the full road replacements needed in the village.
“The set of bonds that were issued the last time. We were able to do about 40 percent of the roads and there are still significant work to be done in the village,” Hance said.
Munsey Park issued a $2.75 million “Legacy Bond” in 2007 to finance capital projects around the village with a two- to 13-year maturity.
The trustees said the village is also seeking to refinance the $1.1 million in bond outstanding from 2007 bonds that carry a 4.10 percent interest rate.
“We’re refinancing the existing bond because we have a lower interest rate and it extends the debt payment term which reduces our annual payment,” Hance said.
Hance said the refinancing will decrease interest rate payments and extend the term of the debt by one year, providing for an annual reduction of approximately $60,000 to the village.
Moody’s Investors Service Inc. on last Monday assigned the village’s remaining debt an aA2 rating. The agency said the strong rating is based on the Munsey Park’s modest but wealthy tax base, stable finances supported by conservative budgeting, low pension and debt burden. The agency also credits the village for being able to stay below the state mandated tax cap.
When Munsey Park issued the serial bonds in 2007, it earned an aA3 rating from Moody’s.
The trustees said the debt reduction is partially offset by an additional year of payments, but it allows for additional financial flexibility.
“The refinance allows us to free up some money which will go towards road repairs,” Hance said.
He said the money will be used to increase the annual road budget or help to pay for debt service used to fund infrastructure needs.
Trustees said they will hire engineers to determine which roads need to be replaced or repaired.