WILKES-BARRE —Mayor Tom Leighton came to council Tuesday with good news — an interest rate quote for a 2014 tax revenue anticipation note that is lower than this year’s.
“We had four quotes we put out. PNC (Bank) came in at the lowest — 1.68 (percent), which we’re extremely proud of,” Leighton told council at its work session.
A resolution authorizing the administration to borrow $3 million via a tax revenue anticipation note, commonly called a TRAN, is on the agenda for Thursday’s council meeting along with an ordinance authorizing the refinancing of $7.5 million in debt.
A TRAN provides cash flow to tide over a municipality for a few months until people begin paying property taxes in the spring.
Interest rates for TRANs submitted by three other banks ranged from 1.87 percent to 2.93 percent.
Leighton said the interest rate on the TRAN borrowed last year for 2013 was 1.88 percent. He believes a recently upgraded credit outlook for the city by Standard & Poor’s Rating Services “certainly helped” the city obtain a lower interest rate.
The city announced on Tuesday that Standard & Poor’s upgraded the city’s bond credit rating from A- with a negative outlook to A- with a positive outlook.
“In between, there’s a ‘stable’ (rating), so we jumped over stable to positive,” Leighton said.
He also believes the improved credit rating will help get the city a better interest rate on the $7.5 million general obligation bonds. The bonds will be put out for bid to the bond market at about 11 a.m. Thursday. Investors will submit bids on interest rates and the city will choose the best. Those numbers will be presented to council Thursday night.
Thursday’s vote on the ordinance will be the second of two required votes. Councilman Tony George voted against the refinancing last month because the mayor plans to use about $200,000 of the anticipated $300,000 savings generated over two years to pay for the recent emergency demolition of condemned properties on South Main Street.
Council meets at 6 p.m. Thursday on the fourth floor of City Hall, 40 E. Market St., Wilkes-Barre.