KINGMAN - If ultimately approved by the lender, the City Council on Tuesday took action that could result in saving nearly $1 million in interest payments on the Hilltop Wastewater Treatment Plant - and in turn reduce the monthly sewer bill for Kingman residents and businesses.
Finance Director Tina Moline told Mayor Richard Anderson and the Council that the Water Infrastructure Finance Authority rejected her request to refinance the treatment plant loan, which currently has a balance of more than $26.3 million.
While WIFA said it would recommend its board reject the city's request, the authority did offer an attractive alternative.
Essentially, the city has more than $3.6 million in debt service reserve remaining, and WIFA will allow it to put that money toward the principal on the loan, knocking down its amount to about $22.7 million and saving the city about $984,000 in interest payments over the 13 years left in the life of the loan.
Moline said WIFA considers Kingman in hardship, which led to the lender's proposed alternative.
She recommended the Council pay down the debt and provide WIFA with an explanation of how the savings would be used - for capital improvement projects, a one-time or permanent rate reduction, or a combination of the two.
Moline also said the Council did not have to make a decision for two more weeks, but members, led by Councilwoman Jen Miles, didn't need to ponder an answer.
"This is a net plus for the city," said Miles in advocating for the alternative.
"Absolutely," said Moline. "It's always best to pay down the principal."
Councilman Ken Dean noted the nearly $1 million in savings was an obvious benefit and Councilman Larry Carver said those savings could be used to offer sewer customers a refund.
The Council voted 7-0 in favor of the alternative.