MADAWASKA – The town is looking to refinance a 1998 wastewater renovation loan to save nearly $214,000 over the remaining 16 years of the loan’s life.

The town still owes $2,911,000 on the $3.6 million loan it received in 1998 to pay for wastewater renovations and reconstruction. The loan was financed at a rate of 3.15 percent.

Refinancing the remainder of the loan with the Maine Municipal Bond Bank could lower the interest rate to 1.97 percent.

If approved by residents and the Maine Bond Bank, the town could save $213,574 between now and 2016 when the loan will be fully repaid.

“We could save a lot of money with this,” Town Manager Arthur Faucher told the Madawaska Board of Selectmen on Tuesday night. “There is quite a difference in the interest rate.

“This has to be done quickly to take advantage of the present market,” he said. “Right now they estimate an interest rate below 2 percent.”

In the first year, the town could save a lot of money, Faucher explained, because the town would not have to make a $181,950 principal payment on April 1. The town would have to pay only $45,851 of interest.

The final payment on the loan would be made on Oct. 1, 2016, to the Maine Bond Bank, if approved by local residents.

With refinancing, the town would make its first principal payment to the Maine Bond Bank in October of this year.

The town’s present loan was financed through the Clean Water State Revolving Loan Program. At the time, the interest rate was favorable for the town.

Madawaska residents must approve the change, and a special town meeting will have to be held in late February or early March.

The final details on interest and other specifics will be determined on the date of pricing when the tax exempt bonds to finance the loan are sold on the market, according to a letter from Karen Asselin, program officer with the Maine Bond Bank.