NEWBERRY — The Newberry County Water and Sewer Authority has approved the initiation process for the refunding of existing USDA rural development debt.
Refunding the existing USDA debt will reduce the interest rate from 4.39 percent to 2.96 percent, shorten the loan term by 12 years (pays off in 2031 instead of 2043), create a manageable increase in debt service and maintain 150 percent debt service coverage, said Daniel Quattlebaum, assistant manger of NCWSA.
“These calculations and analysis are conservative,” he said. “This is if there is no increase in net revenue. It includes issuance costs and no USDA grant funds.”
Refunding the existing USDA debt will generate present value savings of $285,573 and generate gross savings of $1,039,489 plus maintain borrowing capacity for capital improvements and reduce total costs of capital.
Bob Damron, director at Compass Municipal Advisors, said this was an opportunity for the NCWSA to save money. The board unanimously approved the initiation of the refunding process.
In other business, the board heard a proposal by board member Bryan Alvarez to submit a Chappells waterline expansion project, stage two, to the Capital Project Sales Tax Commission.
“The intent of this project is to extend the existing waterline infrastructure in the Chappells community. Stage two is intended to complete the backbone of the water distribution system in preparation for a future stage three project,” Alvarez said. “The backbone will be sized to supply sufficient flow rates for future customer usage and fire protection throughout the system.”
Stage two calls for 12.6 miles (69,000 feet) of pipe and 19 fire hydrants. It will connect to the existing system located on the site of the Newberry County Recycle Center in Chappells. The initial estimated cost is $2,271,734, but that number is subject to an engineering evaluation.
According to Alvarez, some of the benefits of the project include improved fire protection, secure support from the Chappells community for the referendum, lays ground work for stage three, spur future commercial and residential development and will pickup new customers.
“Newberry County sees value in CPST projects like this because it serves two purposes. It provides funding for projects that would not otherwise see the light of day and it directly benefits the citizens of the county that actually pay the CPST tax,” he said. “Without the support of the NCWSA Board of Directors, this project will progress no further. Please consider the merit of this project and once again grant approval.”
Manager Brent Richardson said his concerns with the project include not having a stream of revenue and that there was not an adequate water source to serve Chappells.
Board member Lewis Lee made a motion to table the discussion to give the managers time to bring more information on the project to present. The motion as approved after Alvarez seconded.
In other business, the board approved a logo replacement on the Bush River Elevated Storage Tank for the amount of $6,500.
Reach Andrew Wigger at 803-276-0625 ext. 1867 or on Twitter @TheNBOnews.