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Council agrees to serve as conduit for CRS financing

August 13, 2003|by SCOTT BUTKI

The Hagerstown City Council on Tuesday gave informal approval to serve as a pass-through conduit for about $1 million in tax-exempt financing for Community Rescue Service.

CRS is making the request in order to lower the interest rate and cost of a mortgage with Hagerstown Trust Co., Hagerstown Finance Director Alfred Martin said.

Due to the bond's nature, the city would not be responsible for any issuance costs or for repayment of the principal and interest on the bonds, Martin said. The city would instead be a pass-through conduit for financing between the banks and the nonprofit entities. The debt would not be considered a city obligation or count against the city's credit or debt capacity, he said.

Community Rescue Service Treasurer Tory VanReenen, in a letter to the city, said the refinancing will reduce the current mortgage installments from $9,900 to $7,754 per month, with the CRS board using the savings to upgrade the vehicle fleet.

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The city would have to hold a public hearing and vote on the issue before the bonds are issued, Martin said.

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