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Borrow From Yourself, Collect Interest
The Towamencin Township Supervisors plan to move money from their Sewer Capital Fund into the General Fund and use it for other expenses. In the past the township has taken out bank loans to pay expenses while waiting for tax revenue to come in. Chairman Dan Littley says the Interfund Transfer beats borrowing from a bank and paying interest.
“Instead of paying a bank or a financial organization 2.61 percent of interest, we are paying ourselves interest.”
Littley says the Interfund Transfer will save Towamencin taxpayers about $46,000 this year. The amount of the loan cannot exceed $1.1 million, and it must be repaid by the end of the year.