Sadorus considers how to pay for water project
SADORUS - The village board is continuing to consider ways to pay for planned water-plant improvements.
The plant is due to receive $100,000 in improvements, which will help it to be in compliance with new Environmental Protection Agency standards. Those improvements would include backup generators, bigger pumps and a new circuit-breaker panel.
The board on Wednesday compared the advantages and disadvantages of debt certificates and alternate revenue bonds.
William Glass of First Midstate in Bloomington told trustees last month that the cost to issue $50,000 in alternate revenue bonds would be $5,000. Glass submitted new figures to the board Wednesday indicating that the cost would actually be $2,600, assuming a 4.75 percent interest rate.
Miller said because the amount of money that Sadorus is wanting to borrow is relatively small, a debt certificate would be a more cost effective way to go.
"The bond has a lien against all the property in the taxing district," Village Attorney Marc Miller said.
If the revenue stream identified to pay off the bonds isn't enough, the money could be recovered by raising everyone's taxes, Miller explained.
Bond interest is tax-free, while debt certificate interest is not, according to Miller.
A bond counsel would prepare the debt certificate at a cost Miller estimated between $1,000 and $1,500.
Kerry Gifford, general manager at Sangamon Valley Public Water District, which runs the village's water system, reported that the Champaign County Regional Planning Commission is going to charge the village 6 percent to administer the project.
The village is also applying for a $5,000 design grant through the Department of Commerce and Economic Opportunity's Community Development Assistance Program. As part of the application process, the village had to collect income surveys from residents. Gifford said Sadorus is "well within the guidelines to qualify."