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Council considers refinancing bonds

The Sunnyside City Council at its Monday, April 11, meeting will consider refinancing the city's water and sewer bonds. Such a move could keep the city from having to increase water rates.

Council approved ordinances in 1993 and 1996 dealing with bonds for the city's water and sewer services.

Interim City of Sunnyside Finance Director Art Housler said at last week's Council meeting the city stands to save about $172,000 by refinancing the bonds.

Housler said refinancing the bonds will assist the city in many ways.

Currently, the city has a debt service coverage requirement, which is a financial promise made to investors that the city will collect 40 percent more than the original sale of the bonds. By refinancing the bonds, the city would only have to meet a bond coverage requirement of 25 percent.

Housler pointed out to Council that the city would not be able to meet the current bond debt service requirements of 140 percent in 2006 without increasing water rates.

Council will be hearing from the city's investment banker, Jack McLaughlin, at the April 11 meeting on the bond refinancing plan. Housler recommended in a written report to Council that if Council does decide to adopt a bond refinancing ordinance on April 11, that authority be given, within certain parameters, to allow City Manager Bob Stockwell to sign the bond purchase agreement when the bonds are priced. Housler made this recommendation because of time constraints involved with the bond market.

Council didn't offer any comment per say on the matter, but Mayor Ed Prilucik said he was open to any plan that would save the residents of the city money.

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