Fayette commissioners OK refinancing debt
The Fayette County Board of Commissioners voted unanimously Thursday to refinance $10.364 million of debt taken on in 2023 to fund county projects.
Joseph Muscatello, managing director for Stifel Institutional in Pittsburgh, said the county had opted to refinance about $800,000 less than was originally borrowed in 2023, which helped it receive “very aggressive” offers from three banks, all offering lower interest rates than three years ago.
The loans through First National Bank now carry interest rates of 4.4% for a $2.682 million tax-exempt loan, and 5.56% for a federally taxable loan of $7.682 million.
Refinancing the loan is in keeping with the original plans, said Jamie Inferrera, a public finance attorney at Dinsmore & Shohl’s Pittsburgh office.
“When we did this financing originally in 2023, I knew I’d be coming back here and standing in 2026 to refinance this debt and get a more long-term plan,” she said. “We expected that rates would hopefully drop in 2026, and we are fortunate that they did.”
The agreement also included a provision that the bank will reduce rates by an additional amount if they drop further by the time the ordinance takes effect 30 days from now.
“I was very, very happy with the proposals that we had received, and it shows that the county’s made a lot of progress with their financials in the last couple of years,” Muscatello said.
About half of the county’s debt goes toward the county jail, while the other half goes for refinancing projects that happened “many moons ago,” said board Chairman Scott Dunn.
As of October 2024, the county was at about 24% of its borrowing capacity, Dunn said.
Dunn said the county had been fiscally conservative, with county spending going up 0.8% over the past two years, compared to an inflation rate of 5.3%.
“We are not taking on one dime of additional debt,” he said. “This is not going to cause taxes to go up. This is actually going to be borrowed at a lower rate than we currently pay, which will save the taxpayers money.”