Small Town News

Regional Government

District to refinance and pay off one loan

The Camp Verde Journal of Camp Verde, Arizona

- Advertisement -

District hopes new interest rate will save $2 million

Nearly three months after voters approved the Camp Verde Sanitary District's efforts to refinance its debt, the district's board is starting to take action.

The board is hoping to take advantage of lower interest rates in a new financing deal with WIFA, the state Water Infrastructure and Finance Authority, to hopefully save nearly $2 million over' the course of two decades.

It all depends on how much money the district needs to finish repairs on a wastewater treatment plant that suffered structural failure during testing last year, and how much money it takes to finish the rest of the current sewer expansion project, including new equipment mandated by the Arizona Department of Environmental Quality.

The district is hoping to pay off its loan from Koch Financial, borrow up to $2 million in new money and finish the expansion project.

Mark Reader, the district's finance advisor, said it all depends on the interest rate the district can get on Friday, Jan. 30, the expected closing date for the first WIFA loan.

The district currently pays the loan back at a 5.5 percent interest rate. While rates have been moving dramatically lately, Reader said he thinks the district can get a 3.5 percent rate if events move in its favor.

The downside for the district, Reader said, is that the board is legally obligated to raise taxes if it can't raise the money to pay back the loan through normal revenues collected.

The' total amount that will be borrowed also depends on the result of legal negotiations with the district's engineers; the district wants to get as much money as possible from the groups it feels was responsible for the expensive structural failure at the new plant.

Voters also approved a refinancing of a second loan to be paid by the Town of Camp Verde at $135,000 a year for the next two decades.

The town wants to benefit from any savings earned by refinancing. Sanitary District Board Chairman Gregg Freeman said, during a meeting, that he was open to working with the town.

Once the district gets the money it needs to finish the current project, it can cut the loan off and just pay back what it used, Reader said.

The refinancing effort cost the district $150,000 in fees to lawyers and advisors, which was more than those advisors predicted before the vote was-successful.

Reader said while his fee was higher, he worked many hours drawing up the necessary documents for the refinancing.

Copyright 2009 The Camp Verde Journal, Camp Verde, Arizona. All Rights Reserved. This content, including derivations, may not be stored or distributed in any manner, disseminated, published, broadcast, rewritten or reproduced without express, written consent from SmallTownPapers, Inc.

Original Publication Date: February 4, 2009

More from The Camp Verde Journal