The final piece of a three-step refinancing plan is in the works in Palmerton Area School District.

Zach Williard of Public Financial Management told Palmerton’s board of directors last week that it could save about $500,000 in interest payments by lowering the rate on its 2016 Series bonds. The board plans to take a vote later this month on whether or not to proceed with the move.

“Rates continue to remain at historic lows,” Williard said. “There is really no reason you wouldn’t want to do this. When you issue bonds you have to wait five years before you can refinance them. And that’s what we’re coming up on now. ”

The call date on the bonds is Feb. 15, 2022. The district can settle a transaction within 90 days of that call date.

“The goal would be to have a debt resolution approved at your September meeting, and then we would lock in interest rates from there and close the transaction,” Williard said.

There is about $9.3 million left to pay on the bonds. The current average interest rate is 2.8% and the final maturity is August 15, 2035. Williard said he expects the new interest rate to range from 1.26% to 2.15%.

“There is no new money being borrowed,” he added. “This is simply taking the old higher interest rate on the 2016 bonds and replacing it with today’s new lower interest rate. We’re keeping the same final maturity. It’s the same term.”

Palmerton is projected to save around $76,000 in the first budget year, $60,000 in the second and $26,000 every year after that. “This isn’t something where you get a check in the mail,” Williard said. “This comes in the form of budgetary savings.”

Palmerton has had a good run with refinancing opportunities over the past several years.

Savings on its 2015 Series A bonds came to $1,216,767 over the life of the bonds, while a 2015 bond refinancing netted around $58,000 in savings.

“We’re looking at around $2 million with all of them combined and that’s a great budgetary impact,” Business Manager Ryan Kish said. “It will definitely help us.”