OCR Text |
Show Sewer board considers refinancing of bond Sewer officials are studying whether a $4.9 million general obligation bond should be refinanced now rather in June 1987 when interest in-terest rates could be higher. Rex Ausburn, manager of the Snyderville Basin Sewer Improvement Improve-ment District, said district financial advisors are in the process of determining deter-mining whether the move would save money. The sewer district issued bonds last year as the first step in a 20-year process of financing the $11 million Silver Creek sewer line and treatment treat-ment plant. As part of the plan, the three-year bonds were to be refunded refund-ed for an additional 17 years. Ausburn explained the project originally was financed on a three-year three-year basis rather than with a 20-year bond because at the time of bonding the district did not know the exact cost of the sewer line and treatment plant. However, the district's board of directors now is considering refinan- rrrrt n" r.1 r 1 cing because interest rates are relatively low. Ausburn said if the district waits, it runs the risk of refinancing when interest rates have gone up. The three-year bonds were financed financ-ed at 8.5 percent interest. If the bonds were refinanced now that rate would be about 9.5 percent, Ausburn said. Rates could be even higher in 1987, he said. The $11 million line and plant are being financed by a combination of funding precedures. In addition to the bond, a $4 million loan from the state is financed at 7.3 percent interest in-terest annually for 20 years. The district banked the money it received from bonding while investigating in-vestigating the possibility of private operation of the plant. Those funds earned $1.25 million over the past year. In addition, the sewer district is using $900,000 from its general fund to finance the project. |