By LeAnn R. Ralph
COLFAX — The Colfax Village Board has authorized borrowing $1.17 million through the sale of water and sewer revenue bonds.
The bonds that were approved at the May 28 Colfax Village Board meeting will refinance existing debt and will add new money for water and sewer improvements to the Park Drive extension for Colfax Health and Rehabilitation Center’s building project and for repairing and painting the water tower.
Refinancing the existing debt will save the village $167,000, said Sean Lentz of Ehlers and Associates, the village’s financial advisor.
The village board approved soliciting a proposal for water and sewer revenue bonds from Bremer Bank at the May 14 meeting.
Prior to refinancing, the existing debt carried an interest rate of 4.4 to 5.5 percent, Lentz noted.
The new water and sewer revenue bonds will have an interest rate of 1 percent to 3 percent, with an average interest rate of 2.43 percent; the bonds will be paid off in 2027, he said.
The savings to the water utility will be $101,699, and the savings to the sewer utility will be $65,723, Lentz said.
The interest rates on general obligation bonds would have been a little better than the revenue bonds, but state law limits the amount of general obligation debt the village can have, and Colfax is better off saving the general obligation bonds for other projects, such as economic development or streets, he said.
Since Colfax recently raised the water and sewer rates, the two utilities now generate enough revenue to cover the bonds, Lentz said.
“This type of issue for a village the size of Colfax is the best bet … you still got significant savings,” he said.
According to information Lentz distributed to the village board, the water utility will save anywhere from $6,800 to $11,600 per year, and the sewer utility will save anywhere from $800 to $9,300 per year.
The annual debt service payments for the water utility will range from $55,048 to $60,375, and the annual payments for the sewer utility will range from $28,047 to $37,505.
The Colfax Village Board unanimously approved the resolution to issue the water and sewer revenue bonds.
In other business, the Colfax Village Board:
• Approved a facility rental request for the Colfax EMS Association for a bike rodeo on June 1 at the Colfax Rescue Squad building.
• Approved a facility rental request for a car show and swap meet for the Red Cedar Classic Auto Club at the Colfax Fairgrounds May 16 to May 18, 2014.
• Approved a temporary Class “B” fermented malt beverage license for the American Legion Post No. 131 for the Colfax Fairgrounds from June 13 to June 17.
• Presented a plaque of appreciation to Chris Olson for his years of service on the Colfax Village Board.
• Approved a public participation policy for the village’s update of the Smart Growth comprehensive plan.
• Approved a motion to purchase a desk for the administrator-clerk-treasurer’s office at a cost of $949. The Heritage Hill desk features free shipping.
• Approved paying plan commission members $10 per meeting. A survey of other communities revealed that some municipalities pay nothing per meeting, while others pay anywhere up to $50 per meeting.