Parish refinancing bonds
Published 12:00 am Wednesday, February 22, 2012
By robin shannon
LAPLACE – The St. John the Baptist Parish Council recently approved an ordinance to refinance existing bonds for improvements to the parish water system in an effort to save the parish money on repayment of interest.
The ordinance allows the parish to consolidate and refinance three water revenue bonds that were issued in 1997, 1998 and 1999 for maintenance and repairs to the parish water system. Bond attorney Hugh Martin said the refinancing will reduce interest paid on the loans by more than $842,000 over the life of the bonds. The total amount borrowed was about $5.8 million.
“The procedure is similar to a refinancing of a mortgage,” Martin said. “The parish is getting new bonds at a lower interest rate than what the original money was borrowed at. This will help the parish’s utilities department with its ongoing cash flow problem.”
Martin said the move restructures how the debt from the bonds is paid off. He said monthly payments on the debt will drop from $65,000 to about $30,500.
It also reduces the amount owed to $4.9 million.
“This will help us use money from the water system budget for other issues,” said Parish President Natalie Robottom. “It will help us to be more financially stable. It gives us options to borrow money if needed in the future.”
The refinancing does not extend the term of the loan, which should be fully repaid by 2028.
In other action, the council was provided with updates on a variety of ongoing projects on both sides of the Mississippi River, including the west bank farmers market, the west bank airnasium, the Edgard water treatment plant clarifiers and drainage projects along Homewood Place and Persimmon Street.
Robottom said a chain link fence around the property that will house the farmers market would be erected next week in accordance with the cooperative endeavor agreement with the state Department of Transportation and Development.
She added that site preparation was complete and plans are underway to install lighting. The parish is also developing policies and procedures for operating the market. Robottom said the parish is anticipating funding from the U.S. Department of Agriculture to come by the end of February.
On the airnasium, Robottom said foundations for both the building and the restrooms have been poured and masonry work was scheduled to begin at the end of this week. She said the restrooms will be completed by the end of February, and the entire project will be done by the end of March.
Robottom said the parish has completed repairs to the clarifiers at the Edgard water treatment plant that will extend the life of the components for as much as five years. She said her administration is still seeking a low-interest loan through the Department of Environmental Quality to supplement bond money for an under-the-river water line to connect the Edgard plant with the Lions treatment plant in Reserve.
Robottom said the drainage project at Persimmon Street is 95 percent complete, and the final walkthrough occurred yesterday.
The new drainage pump included in the Homewood drainage project has been installed and was tested Monday. The original pump is currently being dismantled and relocated to the new foundation. Robottom said the entire project will be complete by the end of February.