San Sebastián to pay off loans to save $6.4 million in interest
By The Star Staff
San Sebastián Mayor Javier Jiménez Pérez announced on Sunday that to deal with a reduction in funds he is going to pay off the municipality’s $14.7 million in loans, which will generate a savings of $6.4 million in interest payments.
“The total payment of the debt for financing aims to reduce the impact on the municipal general fund generated by the cuts to the Equalization Fund,” Jiménez Pérez said in a written statement. “This fund represented 58 percent of the total funds we received through CRIM [the Spanish acronym for Municipal Revenues Collection Center] in fiscal year 2017-18, the date these cuts began. Paying off all the debts for financing will allow us to use the funds that we allocated for the payment of principal and interest in the current operations of the Municipality, thus mitigating the negative impact of these cuts.”
The loans were granted through the former Government Development Bank and the CRIM. In addition, the town had guaranteed funds from the sales and use tax and the U.S. Department of Agriculture (USDA Rural Development).
The mayor said the Puerto Rico Fiscal Agency and Financial Advisory Authority did not allow his advance payment of $470,000. That amount will be held in a restricted account.
“Throughout these six years, including this fiscal year, the cuts in the Equalization Fund have represented the amount of $15,213,528 for our municipality,” Jiménez Pérez said. “After the payment of these obligations, the Municipal Surplus was $14,125,883.”