Business News

CCIA Offers Pooled Financing Program to Municipalities
Towns that pay together, save together

A new program designed to pool municipal purchases to take advantage of group buying power is available to towns from the Camden County Improvement Authority (CCIA), the county's economic development agency.

"The program provides cost effective financing to build or purchase projects and equipment," said Freeholder Director Louis Cappelli, Jr. "By financing through this program, municipalities may obtain lower bond issuance costs, lower interest rates and easy access to funds for construction and equipment financing."

Cappelli, the seven-member Freeholder Board's liaison to the CCIA, explained that the pooled financing program allows each of the county's 37 municipalities to purchase equipment through a convenient lease/purchase arrangement. The program is also available for the acquisition of buildings, vehicles, furnishings and related items.

"Towns in Camden County have the option of obtaining equipment, land and buildings more efficiently and economically, by combining with other towns," stated Cappelli. "Typical purchases that could take advantage of this program include computers, fire trucks, copiers, telecommunications systems, dump trucks, ambulances, snow-plows and the construction of facilities."

Some of the benefits a municipality would realize by participating in the county's pooled financing program are lower bond issuance costs, lower interest rates, no down payment requirement, convenient payback schedules and lower financing fees. Because the agreements are made through the CCIA, purchases are not subject to capital statutory debt limitation requirements.

To participate, the governing body of a municipality must adopt a resolution authorizing a purchase through the CCIA identifying specific items and listing anticipated costs. The items are then leased to the municipalities by the CCIA for a predetermined length of time.

In Middlesex County, ten municipalities took advantage of their county's pooled financing program to purchase ambulances, police cars, safety equipment, public works vehicles, and dozens of other items. Carteret, Edison, Monroe, Old Bridge, Perth Amboy, South Amboy, South Brunswick, South Plainfield, South River and Spotswood benefited from the low-cost, flexible county financing.

To date, the Middlesex County Improvement Authority has financed more than $100 million in equipment purchases and saved towns there more than $2.4 million in debt service fees.

The CCIA has expertise in negotiating with financial professionals, trustees, bond counsel, rating agencies, underwriters, and bond insurance companies and can provide their services to municipalities as needed for maximum savings. The agency also can oversee the required approvals from the Camden County Freeholder Board and the New Jersey Local Finance Board.

Since it was created by the Freeholder Board in 1979, the CCIA has played an integral role in financing approximately 50 significant capital development projects totaling nearly $600 million, including apartment complexes, business parks, health care facilities, and assisted living facilities. While it operates primarily in Camden County, the CCIA is also empowered to finance projects in other New Jersey counties which do not have an Improvement Authority.

The CCIA issues tax-exempt debt without being bound by local government restrictions. Capital development financings are structured to meet specific needs, either through Wall Street capital markets or as private placements with local lenders. Bonds and notes are sold on both a competitive and negotiated basis.