By Rich Pollack

Highland Beach may have found a financial unicorn.
As the town continued the process of starting its own fire department separate from Delray Beach, leaders began to look for ways to finance a little more than half of the expected $10 million startup costs.
Rather than go through the time-consuming and cumbersome process of issuing bonds — which would require a vote of residents — town leaders agreed last month to look for bank loans that would provide flexibility and a fixed rate.
What they found was a loan from Georgia-based Synovus Bank with a combination of flexible terms that appear to be just as rare as the elusive mythical creature.
“We call it the unicorn because our financial adviser had never seen anything like it in the marketplace,” said Town Manager Marshall Labadie.
Because of the unique structure of the just over $5 million, 10-year loan, the town likely will see significant savings on the interest it pays.
“In the long run, it will end up costing us less,” said Mayor Doug Hillman, who along with others on the Town Commission looked at several options. “This is a better deal for the town.”
Under terms of the loan, which comes with a fixed 3.26% interest rate, the town is not required to take all of the money at close and will not begin paying interest until it begins taking the money or until a year and a half after closing.
The arrangement also allows the town to begin paying off the loan early without any penalty and makes it possible for partial payments or a full payment before all interest has to be paid.
“It also means we don’t pay interest on money we don’t use,” Labadie said.
Those terms are important to Highland Beach since the town is planning to use the loan to help pay for the cost of building a new fire station.
Both Labadie and Hillman point out that expenses related to the construction will not all come at once, so finding a loan that allows the town to take money when needed rather than all at once was important.
Hillman also pointed out that the town may not need all of the loan since it may be able to find additional money during the course of the construction.
The Town Commission already has pledged to use $4 million from reserves to start the fire department and could pledge additional funds should the reserves grow.
Hillman led the charge for the town to get the loan quickly — and lock in an interest rate — recognizing that interest rates most likely will continue to rise.
“It behooved us to get the loan now, even though we don’t need the money today,” he said.
Along with rising interest rates, the town has had to deal with rising material costs and supply chain issues that could affect the cost of the fire station.
Labadie said he is going over plans for the new station to see if the town can make changes to reduce costs.
Changes, he said, could include different, more accessible materials for things such as flooring than had originally been planned.
“We’re looking at what do we absolutely have to build to satisfy the requirements of what we need for our own fire department,” Labadie said.

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