Loveland: City councillors are debating long-term debt and water rate increase for 2013

lakeloveland.jpg

From the Loveland Reporter-Herald (Tom Hacker):

Whether it’s 13 percent, the smallest bump among options that city councilors will hear about Tuesday, or 71 percent will depend on whether Loveland is willing to assume some long-term bonded debt. If the city tries to pay for water system improvements on its traditional pay-as-you-go basis, rates will rise by nearly three-quarters…

Even the staunchest advocates for pay-as-you-go financing have opened their thinking to issuing bonds and taking on debt, given the historically low interest rates that the bonds carry.

“The last figure we got, the one that we’ve been basing these discussions on, is 1.82 percent,” said councilor Daryle Klassen, the council’s liaison to the Loveland Utilities Commission, a group that takes its recommendation for long-term bonding to the council on Tuesday…”When we measure that against what the inflation rate is going to be over the course of the bond, you’d be foolish not to borrow the money.”[…]

Miles of old water lines under Loveland streets are springing leaks twice weekly on average this year, compared to twice monthly seven years ago. The average cost to repair each leak in that time has risen from just over $3,500 to more than $5,000. Meanwhile, the city’s treatment plant is also nudging close to its capacity, and needs expensive short-term expansion to keep it in line with the city’s projected growth. Utilities commissioners at a meeting earlier this month found that a plan to issue $16 million worth of bonds with a 30-year maturity would fund the needed projects and spread the cost to ratepayers in a more bearable way…

The average monthly residential water bill in Loveland, under the long-term debt plan, would rise from the current $19.69 to $24.25 in 2013.

More infrastructure coverage here.

Leave a Reply