MINGO JUNCTION - Village Council today is expected to discuss a change in the Ohio Water Development Authority financing of the village's water plant that will lower the annual payment and extend the life of the bond.
Charley Bowman, the village's new administrator, said Monday a meeting recently was held with representatives of the OWDA, council and the village administration.
The village financed $7.69 million, with a 5.77 percent bond interest payment. The village has made 33 semi-annual payments of $294,310. The bond for the water plant was for 25 years.
OWDA has agreed to extend the life of the bond to 30 years. The semi-annual payment now will be $271,117.
But Bowman said the recalculation resulted in a credit for almost three payments. The village will be able to skip the two payments in 2013 and make a $47,984 payment in January 2014. The regular $271,117 payment will begin in July 2014, he said.
The steel plant in the village once was the largest purchaser of water. The village received $1,584,960 in water sales in 2008, but the plant was shut down and sold by RG Steel and the village isn't collecting any water revenue from the facility.
Village Clerk John Angelica said he was concerned the village wouldn't collect enough in water usage fees from residents to make the upcoming water plant bond payment.
Bowman said the change in the financing terms of the water plant bond gives the village a "little bit of time but not a lot of time."
"It gives us a little breathing room," Angelica said.
Bowman said he will recommend to council that it completes a five- and 10-year operational and capital-improvement plan for the water and sewer departments. The plan will include a series of rate hikes over the next 10 years that will cover the costs.
"We need to make sure we are never in his position again," Bowman said.
The village also is looking at $2.5 million in costs to separate the storm water and sanitary sewers. The village has received $350,000 in state loans and grants to help with the Ohio Environmental Protection Agency mandated project. The village will have to finance $2.2 million at zero percent interest through the state, Bowman said.
Council today is expected to formalize the hiring of Bowman, as resident of Kent, as administrator.
He has served as an administrator in several Ohio cities, including Geneva and Xenia, and has taught in the master's of public administration program at Ohio State University and is a professor teaching economic development at Cleveland State University and the University of Akron.
Angelica and Bowman said council today also is expected to discuss taking $250,000 from the community complex fund to cover a shortfall in revenue in the general fund. The village will have to make application through Jefferson County Common Pleas Court to transfer the money because the community complex fund comes from a percentage of the village's income tax.
Angelica said there are budget shortages in the senior citizens and fuel funds and other areas of the general fund.
He said there is a void in income tax revenue the village had anticipated in getting from RG Steel but won't because of the plant closing.
Angelica said he will be asking council to work on the 2013 budget before the end of 2012.
"Council will have hard decisions to make," he said.