The city has saved approximately $2 million in interest payments by restructuring $27.4 million worth of debt through the Passaic County Improvement Authority, according to the county.
“This $2 million dollar savings – especially in these fiscally challenging times – is direct tax relief to Paterson and allows it the flexibility needed to provide financial stability in the coming years,” Freeholder Director Hector Lora said.
The savings resulted from the bonds being guaranteed by the Passaic County government which has a much higher bond rating than the Silk City.
Paterson refinanced outstanding general capital bond anticipation notes, emergency notes, special emergency notes, and tax appeal refunding bond anticipation notes, and issuance cost of the Series 2015 Bonds. Freeholder Theodore “TJ” Best said the county calculated the savings by comparing it with a recent comparable borrowing Trenton conducted by itself.
Best said Trenton has a better credit rating than Paterson. “It’s probably even more,” Best said of the savings. “We calculated the savings based on what Trenton got for their interest rate when they went to bond,” he said.
“The City of Paterson is going to continue to look at all options to save money,” Mayor Jose “Joey” Torres said.
Paterson joins Haledon, Little Falls, Ringwood, and Wanaque in utilizing the Passaic County Improvement Authority to save local taxpayers on borrowing costs.
The city’s bond rating is considered “junk” by the market due to numerous recent credit rating downgrades. The city also saved approximately $4 million on bond insurance, according to its bond counsel.
“We are pleased to offer financing programs to municipalities and school districts that provide real savings” stated Dennis F. Marco, chairman of the Passaic County Improvement Authority. The authority acts as a partner in economic development assisting local governments, school districts, and other organizations to finance their projects in the county.
Passaic County Improvement Authority went to market on Monday with the $27.4 million bonds on behalf of Paterson.
“If you have an upcoming project or financing we are available to discuss opportunities that may be realized though the PCIA,” Marco said.
Jay Rahman contributed to this report.