The Linton City Council unanimously agreed Monday night to pay off a 1995 sewer bond issue almost three years early, saving $45,522 in the process.
"Back in 1995, y'all issued some sewer bonds which are almost paid off now," said Sue A. Beesley, a partner with Indianapolis law firm Bingham, Greenebaum and Doll.
Those bonds, when issued, enabled the city to obtain $2.525 million in revenue for sewer upgrades. Interest on that bond issue was 5.3 percent, " a little higher than what we have now."
Beesley encouraged the council to retire the debt earlier than its originally scheduled Jan. 1, 2015 redemption date.
Instead, retirement of the bonds could come this year -- as early as Nov. 15.
The decision draws from funds the city currently has in its coffers, with accountants from H.J. Umbaugh assuring the council they had sufficient funds in hand to retire the bond.
Its payoff amount, according to Beesley, was "down to $735,000."
Retiring the debt also simplifies the process the city will face later this year as it seeks a new bond issue designed to upgrade Linton's storm and sanitary sewers.
"If you do this, there will be no need for a parity test when you do that bond issue," she explained. "Otherwise, you would have to show that you would have sufficient coverage of those obligations to issue new debt. So it helps you that way."
The city's already received a half-million dollar grant from the state Office of Community and Rural Affairs (OCRA) for improvements to the wastewater treatment plant.
An expected State Revolving Fund Loan of around $3.5 million, potentially as early as this fall, could also help fund the effort.