Valparaiso wants to refinance some bond debt
BY JAMES D. WOLF JR. Post-Tribune correspondent October 15, 2013 6:20PM
Updated: November 17, 2013 6:24AM
VALPARAISO — The city is refinancing some water and sewer bonds to save money, but whether that’s feasible depends on the federal government.
If interest rates stay at 2.75 percent, the city could save $735,000 total in interest costs; the City Council on Monday voted to proceed with refinancing.
The Valparaiso Utilities Department wants to issue new bonds for:
— The 2002 water works revenue bonds, which have an interest rate of 4.9 percent and outstanding principal of $4.8 million.
— The 2000 sewage works revenue bonds, which have an interest rate of 3.9 percent and outstanding principal of $8.4 million.
But both plans hinge on being able to refinance the debt.
“If they do not take the right steps on Thursday, then all bets are off,” said John D. Julien of consulting firm Umbaugh and Associates.
Utilities Director Steve Poulos said refinancing is possible because the department recently decided on where to dig for a new water source and because Pratt Industries is bringing in a $260 million paper recycling plant.
The extra money would go to improve utilities and the new facility off Joliet Road and would also ease any rate increases by 1 percent each for water and sewer fees.
Also at the meeting, resident Walt Breitinger raised concerns about how the new Pratt plant would impact the water treatment plant.
The plant would be one of the largest water users and “one of the largest producers of effluent,” Breitinger said.
He asked that the city bring in the Indiana Department of Environmental Management or the Environmental Protection Agency to look at the potential for colloids — microscopic particles — and chemicals used in de-inking the recycled paper.
The water used would go to Salt Creek and on the Lake Michigan, which creates potential liabilities for the city from Lake Michigan watershed protection groups.
Poulos said the proposed recycling plant would use 1.1 million gallons of water a day but due to evaporation would put 600,000 to 700,000 gallons a day into the system.
The plant would have a pre-treatment facility, pre-treatment permit and licensed operator to meet city ordinances.
The utilities department has also spent time and money testing pre-treated effluent from similar situations and believes the department can handle it, Poulos said.