East Carbon City finalizes bond restructuring process
During the June 26 East Carbon City council meeting local officials finalized closing documents that decreased the city's bond payments via a decrease in the original interest rate.
During the last 18 months, the municipality has been seeking to restructure the bonds because of the lack of revenue coming into the city from the East Carbon Development Corporation's landfill.
Due to downsizing at the local disposal facility and garbage diversion to other landfills ECDC's contribution to the city has been cut to $136,000 for the calendar year.
At the time that the municipality secured 8.8 million dollars worth of bonds for city wide infrastructure renovation the annual payment was closer to $600,000 per year, according to city officials.
In order to maintain their bond obligations East Carbon City Mayor Orlando LaFontaine has approached the water quality board, Permanent Community Impact Board, and other lending bodies to discuss restructuring the interest rate of the city's bonds.
The current restructuring effectively lowers the city's interest payment from the current rate of 5.5 percent to an unprecedented 0 percent rate.
"This interest rate adjustment is going to save East Carbon a sizable amount of money on a monthly basis," said East Carbon City Attorney Jeremy Humes.
The rate restructuring along with the city's recent increase in sewer rates will assure that the city is able to maintain its obligations to the various lending bodies.
In addition to restructuring the current bonds the city has also been placed on the CIB's funding list for a $766,000 grant that will completely finish the city's infrastructure renewal.
"This will complete the city's infrastructure, this will make us current," said the East Carbon mayor at an earlier meeting.
The Utah Department of Environmental Quality and Darrin Robinson assisted the city in proposing the grant to the state community impact board, which would run a new line from the riding club property in Whitmore Canyon to the East Carbon City water storage tanks.
According to city officials the state-of-the-art pressurized line will insure the safety of the municipality's culinary water supply for years to come.
However, if circumstances change at ECDC, the rates could change within the bond agreements as well.
"If we start to see a sizable revenue increase from ECDC the bonds will revert back to the original 5.5 percent rate," commented LaFontaine, when asked if the city could pay off the bond agreements early.
To that effect, the city could start to see more money from the local landfill through an increase in the county rate for dumping municipal waste.
"If we want to see the doors stay open at ECDC, the county is going to have to start paying a reasonable rate to dump there," said East Carbon Councilmember David Maggio. "If something were to happen and that landfill had to close, the county as a whole could be looking at as much as $8 million to open a new facility and that would be necessary if ECDC were to close."
Maggio reported that a change in the county payment schedule could total as much as $350,000 in new revenue
According to East Carbon City officials, the county commissioners plan to conduct a public hearing on July 18 to discuss payments to the landfill.