Berne council again delays decision on sewer financing
Another week, another discussion regarding an ongoing sewer project in the city of Berne.
Clerk-Treasurer Gwen Maller told council Tuesday evening she received a call from Jeff Rowe, of H.J. Umbaugh & Associates in Mishawaka, requesting councilors make a decision regarding how to finance the project to allow him to proceed with the necessary paperwork.
Rowe discussed two options with the council during previous meetings for the repayment of the bonds, based only on the estimated cost, which currently stands at approximately $7.3 million.
The first option is a level payment structure, meaning the city would repay the money at level payments throughout the term of the bond. The second option is a wrap option, in which the city would wrap the repayment of the new bonds around existing bonds, essentially meaning the city would not begin repayment of the new bonds until the old bonds are paid for.
Rowe informed Maller the project financier — the State Revolving Loan Fund — has locked the city into an interest rate of 2.33 percent, regardless of which repayment option council chooses.
While the level option allows the city to pay far less interest over the life of the bond — approximately $1.9 million versus about $2.3 million with the wrap structure — the impact to citizens would be greater, something the council is trying at all costs to avoid.
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