Pine Township reached the halfway mark this week in paying off the $10 million borrowed to finance construction of .
The Pine Board of Supervisors voted 5-0 Tuesday to make an $865,000 pre-payment on the principal on an loan, bringing the total owed to $5 million.
Supervisors Chairman Michael Dennehy said the original $10 million borrowed in 2006 also included funds to build the new fire station for , which provides fire protection services to the township.
The decision to make the pre-payment is a simple one, Dennehy said.
"Just do the math," he said. The money sitting in the bank is drawing only about $600 a month in interest while the township pays $15,000 a month for the loan, Dennehy said.
Paying down the principal saves money on interest payments.
"It's like paying off a mortgage," he added.
The community center opened in January 2009 and
This is not the first time, Pine has made pre-payments on the loan. Here is a timeline on the loan and payments:
September 2006—Pine borrows $10 million from S&T Bank to cover costs of Pine Community Center and new fire station for Wexford Volunteer Fire Company.
August 2009—Supervisors vote to make $1 million pre-payment on the loan.
September 2010—Supervisors vote to refinance loan with two notes for a total of $8.5 million.
- ESB Series A Loan for $5.9 million would have a fixed interest rate of 3.55 percent because the township agreed to use ESB as its main depository throughout the life of the loan.
- ESB Series B loan for $2.6 million would have an interest rate of prime minus 0.25 percent with a rate cap of 4.35 percent.
December 2010—The township makes a $920,000 pre-payment on the Series B loan.
November 2011—The township makes a $1.7 million payment, which paid off the Series B loan in full.
September 2012—The supervisors vote to make an $865,000 pre-payment on the ESB Series A loan.