Woodside refinances its loan on Town Hall

By BARBARA WOOD

With interest rates at their lowest levels in many years, the town of Woodside has decided to do what many homeowners have done recently -- refinance its mortgage to substantially lower its payments.

The Town Council voted unanimously at its April 13 meeting to refinance the certificates of participation that were originally issued in 1990 to finance the construction of Town Hall. Town Manager Susan George said the change should save the town $40,000 a year.

The town is currently paying interest of 7 percent a year. With the refinancing, the interest rate will drop to 5.35 percent, reducing the town's annual payment from $198,000 to $162,000. The town will also save administrative costs by holding the certificates in a different manner.

Certificates of participation are a funding method often used by public bodies. The certificates are held by a separate corporation, which in this case will be the Municipal Finance Corporation. The corporation holds a lease on town hall for the life of the certificates. The building is then subleased back to the town, which pays off the certificates as its lease payment. When the certificates are fully paid in August 2015, the town hall will remain the town's property and the lease will end.

The refinancing is for $1.78 million. The original issue was for $2.24 million.



© 1999 The Almanac. All Rights Reserved.