by Andrew Martin
The Town of Morristown has decided to refinance the loan that the town has for the Bridge Street bridge over the Lamoille River in downtown Morrisville. On Monday, December 10, the Morristown Selectboard voted to refinance the loan that they have with Community National Bank for the bridge, which was put in place in the summer of 2010.
At the time of their decision, the Town of Morristown had an outstanding balance on the bridge loan of $1,035,953 with a remaining term of 17 and a half years with an interest rate of four percent. The terms of this loan meant that Morristown was making a semi-annual payment of $41,658.04. Board member Steve Rae brought forth the idea of looking into refinancing for lower interest rates on the loan and the options were presented by Town Clerk Mary Ann Wilson at the December 10 meeting.
The options that Wilson presented the Morristown Selectboard involved a new interest rate of 2.52 percent for the loan that had two different repayment options. The first option involved keeping the same term of 17 and a half years for the repayment of the loan, which with the new loan rate would result in a semi-annual payment of $36,786. This plan would result in a savings of $170,500 over the life of the repayment term.
The second option under consideration by the board was to accept the new interest rate and to make a semi-annual payment of $41,683.00. This new payment would be almost identical to the old semi-annual payment and when combined with the lower interest rate would mean that the loan could be paid off in 15 years and would save the town approximately $207,500.
After very little deliberation, the members of the board voted to adopt the second option, reducing the interest on the loan to 2.52 percent, maintaining the semi-annual payment at near the same level as in the past, and paying off the loan in 15 years rather than in 17 and a half. By choosing this option over the other presented to them the board saved the town an additional $37,000 over the other refinance offer and means that the loan will be paid off two and a half years sooner than originally planned.