Mayor: Refinanced loan will save Troy $850,000

Troy’s largest loan has been refinanced, and Mayor Darren Coldwell said the town will save $850,000 as a result.

The town got the idea to refinance the loan after City Clerk Tracy Rebo attended a session with the Montana Municipality Institute. Several clerks mentioned the lower interest rates available to their small towns on rural development loans, and Rebo thought Troy should pursue similar action.

The loan agreement was made in 2007 with U.S. Bank. The loan was originally to be repaid in 40 years. Coldwell and Rebo were able to slash eight years off the repayment plan. The plan now is to repay the outstanding $1.75 million in 25 years.

“We took this loan when all communities were mandated by the state to update their water systems,” Coldwell said. “In February, Tracy and I looked over our loans. I picked up the phone one day and asked the state for direction. You know how it is dealing with refinancers — more and more and more information.”

The loan previously included a 4.125 percent interest rate. The rate is now set at 2.5 percent. While the immediate impact on taxpayers will be minimal, Coldwell said he was proud to save the town money in the long run.

“I think the average payment in a month for Troy will go down by about $250,” Rebo said. “But it saves me a lot of time with the rural development paperwork. In fact, now we only have to make payments twice a year. It took weeks to figure that paperwork out. We even had a rural development guy come in to help us out and he could not understand it either.”

Coldwell said he and Rebo are now looking at refinancing the town’s sewer loan. Rebo said that loan would also likely be reset to 25 years.

“Two years ago the sewer department was about $34,000 in the hole,” Rebo said. “We had to increase rates and now it is back in the black. It would be good to refinance that loan as well.”