The Town of Oberlin’s council approved a resolution which will allow the town to seek information in regards to refinancing and consolidating sewer bonds in an attempt to find savings.
Recently a meeting between Luke Abrusley, city attorney; Romelzy Willis Jr., councilman; and Mayor Joseph “Moochie” Manuel led to the trio gathering information on whether the two could save money by lowering the interest rate on the repayment of bonds for its sewer system.
“In today’s economy, I think we can get a lower rate,” Romelzy told the board.
Michael J. Busada with Butler/Snow of Shreveport explained the mechanics of refinancing and possible interest rates the town could receive if it chooses to refinance. He said the town would refinance through commercial lenders instead of using government lenders.
Presently the town has 27 years remaining on its USDA loan.
Busada told the council it could go from 4.1 percent to 1.25 percent, which would slowly raise over the loan period to 3 percent. He thought this path would save the town approximately $359,605.35 over the 27 year period of the present loan, which would be a savings of about $13,318 a year. He also believed by refinancing the town could see a lower debt service or no debt service at all.
Busada told the council there would be no obligation, and it would owe his firm nothing if the council did not agree to the final terms. He said the resolution would allow the firm to begin the process. He said once the process began, they would return to the council with exact figures, etc. He also said the council could hold off on the sale of the bonds if the timing wasn’t quite right if the market turned in a negative way.
If the town refinanced last week, Busada said it could possibly have save another $100,000, but due to COVID-19 and the upcoming election, things have changed.
Mayor Manuel asked if this would consolidate several bonds and was informed it would. Questions about USDA’s involvement were discussed, and council members learned USDA often issues loans and encourages government bodies to find ways to save money in the future.
Busada said from his research, the market should be at 1.25 percent for the first five years. The interest rate would increase to 2 percent over the next five years, then 2.75 percent and finally 3 percent which would save the town some dollars in repaying the funds.
“This sounds like a good deal to me,” Wayne Smith, councilman-at-large, said. “My only question is where have you been?”
Mayor Manuel said he hoped this was as good as it was sounding.
The council agreed to the resolution allowing Busada to begin the process to sell the bonds at a lower interest rate. It also states it cannot exceed $2.5 million.
In other business, the town set Halloween for Saturday, October 31, from 5 to 7 p.m. Police Chief Grady K. Haynes said they would be patrolling.
The council also approved minutes from its September 4, and 28, meetings and paid October’s bills. It learned that its sewer plant is in compliance with the state at this moment due to the work by Russell Turnage, Turnage Enviornmental Services. They were hired in January to help the town with issues at the plant. Glenn Turner with Meyer, Meyer, LaCroix and Hixson Inc. said this was good news.
It tabled auctioning off equipment until it could research utilizing Ebay, an auction company or posing items to Facebook™. It will be discussed at the next meeting. The town has a fire truck, two police cars, over 900 water meters, over 500 gas meters, etc. to auction.
