Palmerton Borough Council approved an ordinance to refinance bond issues and bank notes in light of attractive loan rates during Thursday's meeting, a move that could potentially net significant savings.

The savings, based on recent moves in the market, could be between $92,000 and $180,000.Those figures made the board's decision an easy one, voting unanimously in favor of formally accepting Wayne Bank's proposal for refinancing.The process should be complete within a month, following state approval."I'm into saving some money," board President Terry Costenbader said.The refinancing measure includes bank notes from 2006, which were used to purchase a firetruck, and bond issues from 2012.Public Financial Management, the borough's financial advisors, began exploring refinancing options last summer, initially opting for bank loan financing before looking into the bond market."At the time, the bond market was going to produce more savings than if we took the bank loan route, so we switched back to the bond issue last fall," PFM director Zachary Williard said. "We geared up for that, and then we actually stopped the process at the very last week, because the bond market moved away, and there was no longer any savings to be had in the refinancing process."Borough manager Rodger Danielson said that the market fluctuation reduced an expected savings of around $120,000 to about $4,000, rendering the refinancing option almost pointless at the time."It wasn't worth the paperwork," Danielson said. "So we said we'd just put it on hold, wait and see."Williard and PFM have kept an eye on the market since then, awaiting an opportunity for better rates.Just recently, market rates dropped, restimulating interest in refinancing.Danielson said that the borough proceeded to look around at smaller, local banks that had showed interest in refinancing last year in order to explore the bond market again."We contacted some of them, First Northern, Wayne, and they showed a lot of interest again. Rather than the bond market rate, they gave us their best loan rate, which we were able to lock in," Danielson said.Currently, the borough's bank notes for the firetruck purchase are held at a fixed rate of 4.15 percent, and the bonds vary from fixed rates of 2 percent to 3.625 percent.The bank loan refinancing offer from Wayne Bank will provide a 2.3 percent fixed rate for seven years, with a variable rate thereafter.While this may seem like a risky move, Williard explained that a cap on the variable rate will ensure that the borough still saves money, no matter what happens in the market."The variable interest is OK as long as you have a very low cap rate, meaning that even if rates are over 20 percent, we know your variable rate will never go above the maximum cap rate," he said. "The cap rate they offered you, 3.75 percent, is very, very, low for a transaction that runs until 2034. It's a very safe cap rate."By the end of the transaction period in 2034, the refinancing option will allow the borough to save between $92,000 and over $180,000, well above their initial savings benchmark of $25,000.Other businessIn other matters, council acted on the following items:• Donald Heiney was approved for the Police Civil Service Commission.• Code officer Doreen Curtin's resignation, set for the end of September, was approved.• The Police Pension Fund 2018 minimum municipal obligation in the amount of $140,175 was approved.• The Non-Uniformed Pension Fund 2018 minimum municipal obligation in the amount of $57,135 was approved.