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Buena Vista Public Service Authority is seeking funding from the United States Department of Agriculture’s Rural Development agency that, it is hoped, will improve the city’s financial situation so it can afford to undertake a major upgrade to the city’s wastewater treatment plant.
The funding, if it’s approved, would allow the PSA to purchase the city’s water systems, which will help alleviate current debt that the city has.
Brian Kearney, Buena Vista’s city attorney, provided information Sept. 21 on the details of this application for USDA financing to the PSA, whose members also serve on City Council.
“We’ve got an opportunity to refinance key debts that we currently have with the water system – the Dickinson well financing, and we have some USDA financing from 2004,” said Kearney.
Buena Vista has a current debt of $5.33 million and will be filing an application with the USDA for around $5.45 million to allow for some “wiggle room.”
“They may be able to slip us in before the end of this fiscal year, which would lower the interest rate and the payment schedule for both debts dramatically, which gives us room to then look at financing for the [WWTP] plant,” Kearney said. “We don’t know yet how much the [WWTP] is going to cost and how much to finance, but this gives room – several hundred thousand dollars of room – that we can use towards debt for the sewer plant without having to raise rates.”
According to Kearney, the refinancing of the Dickinson well and other water projects will bring down interest rates to under 3 percent.
Jason Tyree, Buena Vista’s city manager and executive director of the city’s Public Service Authority, provided clarity as to how much wiggle room the city could have.
“The number that I was given [from] the USDA and our finance director was $300,000 that would free up annually for other debt service potentially in the future,” Tyree said.
However, there is still some gray area involved with applying for this funding.
“The way that this works is, [the USDA] cannot technically refinance a d ebt. … B ut, b ecause we say it is a purchase, instead of a refinance, this is something that under their regulations is allowed. As of [Sept. 21], they are still going up the chain to see what they can do,” Kearney said.
All members of the PSA in attendance voted unanimously to approve the resolution to facilitate financial assistance from the USDA and will await the result of their application.
“This has all come about very quickly and is very tentative,” Kearney said. “But it is just a refinance of the two existing debts that we have.”
If the city meets the conditions set by the USDA, he added, the application for funding
