YOUNGSTOWN

The board of control agreed to have the city borrow more than $4 million for the trucks and bins it will use for its residential garbage-collection program.

The board voted at a Friday special meeting to borrow money from Huntington Public Capital Corp. of Columbus over 10 years with a 2.4 percent interest rate for the trucks, and over seven years with a 2.25 percent interest rate for the garbage bins.

The eight garbage trucks cost $2,455,200. The city will pay $279,000 annually for 10 years to Huntington. The $2.79 million payment includes $334,800 in interest.

The 22,000 96-gallon bins for Youngstown's residential garbage-collection customers cost $1,149,542. The city will pay $179,500 annually for seven years to Huntington. The $1,256,500 expense includes $106,958 in interest.

The total interest cost is $441,758.

The low interest rates "demonstrates the continued positive credit quality of the city," said Finance Director David Bozanich, a board of control member.

"We're satisfied with the rates we received."

Read more about the situation in Saturdays Vindicator or on Vindy.com.



PEORIA, Ill.

With only enough money to get by for a few more months, Peoria Public Schools are hoping the severity is even more apparent to lawmakers.

The districts comptroller Mike McKenzie said they need a state budget and they need it now.

If its after the elections, thats November. Thats when wed be talking about running out of money, he said.

The district says they could hold off until late November, maybe December, without a state budget before having to borrow money or shut down all together.

I cant imagine what they would do if Peoria Public Schools, 13,000 kids did not have a place to go every day, McKenzie said.

But even with a state budget, theyll still be operating in the hole. McKenzie said the district has been trying to keep up, having made cuts along the way including cutting payroll by nearly ten-percent. Its a struggle because the last thing in the world I want to do is a cut a teachers position.

But reducing staff and making other cuts are the only options for the district right now.

That, and wait for movement in Springfield.

Contact your local state representative, you state senator. Contact the governor. I mean, as a tax payer, its a little embarrassing, Change 150 Spokesperson Sea Stipe said.

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Its not hard to imagine: A financial crisis suddenly erupts and you need a significant chunk of change to pay for an unexpected home repair or just to pay the mortgage after you unexpectedly lose your job. What do you do? Well, you might be tempted to borrow money from your 401(k). Think twice or thrice before doing so, though.

Borrowing from a 401(k) is something that many people have considered and many people have done. According to a 2015 report  from Fidelity Investments, which administers many of 401(k) accounts, about 22% of employees had outstanding 401(k) loans (with that level representing the lowest level in five years). Some of those folks may have had little choice, but many could have and should have avoided taking out that loan.

Why you shouldnt borrow money from your 401(k)

A key reason to not borrow from your 401(k) is because it will hurt your retirement. A 401(k) is a retirement account, after all, collecting contributed dollars over time and letting them grow for your future needs in a tax-advantaged fashion. Take money out of it prematurely, though, and what you withdraw will no longer be working for you.

Imagine, for example, that you withdraw $12,000 from your 401(k) and you pay it back in five years. If it had stayed in your account and had been invested in the stock market, earning, say, 10% annually on average, then it would have grown to about $19,000. So you would lose out on $7,000 of growth. Also, in the following years, that $19,000 would have kept growing. Removing a chunk of your 401(k) will deliver a real setback to your savings -- especially if you borrow an extra large sum for an extra long period, such as for a down payment on a house.

Another drawback is that if you cant repay the loan, it will be considered an early withdrawal and may trigger a 10% penalty -- if youre younger than 59 1/2. A 10% penalty on a $12,000 loan is $1,200, a rather significant sum.



For the second time this month, Middletown taxpayers got some good financial news from the city's school system.

Middletown school officials said Friday they will save $2.5 million during the next decade because of favorable re-financing of district bonds that resulted in a lower interest rate.

Earlier this month, district officials said their latest, five-year budget projections showed no need for a new school tax levy until after 2020 and reported the school system's bond rating had improved.

"Municipal bond issues have provisions that allow the issuer to refund or refinance the existing bonds and replace them with new refunding bonds," said Middletown Schools Treasurer Randy Bertram.

"The district has opted to refund and issue the bonds earlier than normal to take advantage of the current low interest rates for a taxable refunding issue," said Middletown Schools Treasurer Randy Bertram.

School districts use bonds to borrow money to pay for buildings and facilities.

If a bond levy is approved by voters, the district issues bonds. A bank or financial institution will sell and administer the bonds.

Betram said a bond is like a loan and taxpayers will pay back lenders or bond holders the principal and interest on the loan through the taxes paid to the school district.

Middletown's annual operating budget for the upcoming 2016-2017 school year is $71.3 million.

The $2.5 million in savings during the next 10 years will not result in any refunds to taxpayers but rather lower the overall operating expenses of the district.

The refinanced bonds, which were approved by voters in 2007, have helped pay for construction and building renovations for seven elementary schools and one sixth grade center learning center.

This summer construction will begin on a new Middletown Middle School and renovation of the adjacent high school. Both projects - which also are funded by state construction monies - were the result of voter approved bond levy in May 2014.

The city district is the second school system in Butler County this month to re-finance taxpayer approved bonds to save money via lower interest rates.

Officials with Lakota Local Schools said bond re-financing will save $900,000 from its operating budget this year.

Bertram said Middletown has "been working very hard over the last two years to improve the financial condition of the district while implementing internal controls to keep us on track."

Middletown Schools Superintendent Sam Ison said, "I pledged that I would be a good steward of our tax dollars, to the community and our tax payers, and this is one area we have ensured financial responsibility."