By LeAnn R. Ralph
COLFAX — The village’s financial advisor, Brian Reilly of Ehlers and Associates, says that it would be financially feasible for Colfax to borrow $450,000 for wastewater treatment projects.
Reilly spoke to the village board about refinancing existing debt and borrowing additional money at the Colfax Village Board’s November 26 meeting.
The village could put nearly $258,000 in general obligation bonds on the tax levy that includes $151,000 for the Park Drive extension, $87,000 for the new fire hall and $20,000 for Evergreen Cemetery, he said.
In addition, the village could finance $54,000 of the water portion of the Park Drive extension with water utility bonds and $123,000 for repainting the village’s water tower, Reilly said.
Sewer utility revenue bonds could support $32,000 for the sewer portion of the Park Drive Extension and $450,000 for the wastewater treatment facility, he said.
Under the current wastewater treatment permit, Colfax has a deadline of December 31, 2013, to reduce the phosphorus discharge either through mechanical or chemical means or by doing pollutant trading with farmers upstream from the village.
Colfax also could refinance four existing loans to extend balloon maturities and to take advantage of the current low interest rates, Reilly said.
Refinancing would include $540,000 for 2004 promissory notes; $275,000 for 2006 promissory notes; $350,000 in TID No. 3 for a 2006 promissory note and $201,000 for a 2007 promissory note, he said.
The total issue of bonds would be for $1.3 million, which would leave the village $850,000 in general obligation borrowing capacity, or 40 percent of the borrowing capacity, Reilly said.
Reilly said he recommends maintaining 15 to 20 percent in reserved borrowing capacity.
The levy impact for debt service over the next 14 years, until 2027, would range from $1.58 per $1,000 of property value to $1.72 per $1,000 of property value, according to information Reilly provided to the village board.
The mill rate for debt service currently is $1.51 per $1,000 of property value, amounting to $151 on a $100,000 property.
The mill rate for refinancing and new debt would add anywhere from $7 to the property tax bill to $21 to the property tax bill for a $100,000 property.
The mill rate projections are based on an interest rate of 2.75 percent.
Refinancing would extend the current debt to the maximum term limit to eliminate the balloon payments, Reilly said.
Right now “it is a low interest environment. This is the time to take advantage of that,” he said.
“New money” general obligation bonds must be done by a public sale, but the refinancing can be done privately, Reilly said.
“We would be interested in finding a friendly partner (for the refinancing),” he said.
Reilly said he could come back to the Colfax Village Board in December or January with a presale report, and the bond sales could be done in January of February.
“I would like to see the village take advantage of the interest rates,” Reilly said.