Hamilton Township has received a nearly $4.1 million loan from neighboring Robbinsville Township in an arrangment officials from both municipalities are calling “a win-win.”
Hamilton has approximately $14.5 million in short-term debt, known as bond anticipation notes, coming due in February 2021. Robbinsville—sitting on a large cash surplus—offered its neighbors $4,098,536 at an interest rate of 1 percent.
A joint press release issued May 22 said that interest rate is significantly lower than what Hamilton would pay in the current bond market. Robbinsville officials said their taxpayers should be happy because Hamilton will provide a higher rate of return on the cash than what Robbinsville’s bank currently provides.
“This is a way for us to help our neighbor, while increasing the return of our cash on hand now that bank rates have tumbled during the pandemic,” Robbinsville Mayor Dave Fried said. “It is a win-win for taxpayers on both sides.”
Hamilton approached Robbinsville to pursue the deal, and on May 18, sold just over $4 million of the $14.5 million in short-term debt to Robbinsville. Hamilton sold the remaining $10.5 million of notes to TD Securities at a rate of 1.15%.
Hamilton Township Mayor Jeff Martin hopes to unveil his first budget in June. The Martin administration has said the township faces a difficult financial situation, placing most of the blame at the feet of Martin’s predecessor, Republican Kelly Yaede.
“Hamilton Township was left with a significant budget hole by the Yaede administration, so our financial team was forced to think outside of the box in order to lead the township back to financial stability,” Martin said in a statement. “The option to borrow direct from Robbinsville was mutually beneficial to both towns. Hamilton was able to pay off our debt at below market rates, and Robbinsville earns money from the accumulated interest at a more profitable rate than it otherwise would. We’re thankful to have neighbors in Mercer County that recognize that working together and lending a helping hand, especially during these uncertain economic times, is best for all of our residents.”