Salisbury Township will borrow $6,440,000 to finance improvements to its water and sewer infrastructure and capital improvements.

Commissioners voted 5-0 to approve a Borrowing Ordinance for General Obligation Bonds Series of 2016. Commissioner President James A. Brown made the motion, seconded by Commissioner Debra Brinton, to bring the ordinance to a vote.

The ordinance was amended at the Feb. 11 meeting when the vote and discussion took place because the original amount to finance was to have been $6,560,000.

Favorable interest rates and the township’s excellent financial rating contributed to the savings.

“Just think of what happened in the past few weeks has worked in your favor,” Christopher M. Gibbons, principal, Concord Public Finance, township financial consultant, said. Concord Public Finance handled the Internet bond auction held the morning of Feb. 11.

There were 29 firms and four banks in the offing for the refinancing and additional financing. Offering bonds provided a more favorable interest rate.

“The bond issue is the better deal. It’s a great deal for the township,” Gibbons said.

Of 15 bids received, Janney Montgomery Scott, LLC was the apparent successful bidder with a 2.31 percent interest rate.

“That’s an incredible rate,” Gibbons said.

The favorable interest rate and investor interest in the bonds is attributed to this year’s downturn in the stock market. Investors are looking for a “safe bet,” or more secure financial instruments, in which to invest.

“Your bonds were well-received in the market,” Gibbons told the board of commissioners and township officials.

“Your Double A Rating was affirmed by Standard & Poor’s,” Gibbons said of the township’s financial rating, which he said is one notch below the federal government’s Double A Plus Rating.

Gibbons said Salisbury’s solid fund balance and township demographics contribute to its favorable rating.

It is estimated the township will realize $16,000 to $18,000 interest savings annually for a savings of about $286,309 over the life of the bonds.

“I think this is a very good financial package,” Gibbons said.

“This is wonderful. You did a great job,” Brinton said.

“So did Cathy,” Gibbons said, referring to Cathy Bonaskiewich, Salisbury Township assistant manager-director of finance and acting township manager.

Funds from the bonds are expected to be utilized for projects by 2018 and paid back by 2035.

“It says we have ‘adequate management,’’ Brinton asked. “Is that good?”

Gibbons confirmed it is. “That’s a result of your hard work,” Gibbons said.

Atty. Michael A. Gaul, partner, King, Spry, Herman, Freund & Faul, LLC, township bond counsel, explained the ordinance needed to be enacted by township commissioners for the bonds in order for it to be a legal transaction.

The ordinance is expected to be reviewed by the state. After a 20-day window, closing on the bonds is expected March 15.