Why can’t the Borough refinance our current debt to get a better rate over a longer period of time?
They can, and it is referred to as a “Refunding Bond”, which in government terms is equivalent to refinancing. In order to achieve this, a “debt restructuring plan” must first be developed and approved by the Division of Local Government Services, Local Finance Board. Additionally, the Borough would also need advance approval by the New Jersey Environmental Infrastructure Trust as this is where the Borough sewer utility debt was approved. In order to be approved by both governmental entities above, the Borough would need to authorize the issuance of a “Refunding Bond Ordinance”, which would authorize new bonds to refund/redeem/replace existing ones. This bond would not go into effect until approved by the State if certain criteria are met. The most important criteria is that the refunding my produce at least a 3% savings overall. The problem with refunding bonds for the purpose of debt restructuring typically do not produce the State required savings amount, and frequently produce a “d
