Kiowa: The town is working on paying down debt incurred from water and sewer projects

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From The Denver Post (Carlos Illescas):

The town is deep in debt after borrowing millions of dollars for water and sewer projects, with some locals worrying that the historic town — first settled in 1859 along the banks of Kiowa Creek — could have gone bankrupt. Kiowa joins the ranks of communities large and small that are struggling to get out of the downturn in the economy.

Kiowa’s situation got so bad that a judge last year appointed an outside firm to take “receivership” of Kiowa’s water and sewer system, charged with helping the town pay back $5.5 million for a new water and sewer system the town had defaulted on with several banks…

The town is moving toward a separate water and sanitation authority district. That move is expected to attract a new federal loan spread out over a longer period of time and featuring a lower interest rate…

Kiowa’s downfall began in 2005, when the town board approved issuing bonds for $5.5 million. About 60 percent of that money paid for new water pipes and the water tower, and 40 percent went to a mechanical sewer plant. The town had previously used natural “lagoons” for disposing its waste. The upgrade was mandated by the state because Kiowa didn’t meet certain quality standards.

The water tower was needed, the town council felt at the time, in part because a new residential subdivision was being planned there — and those folks would need water. It made sense for the town to do it, they rationalized, because homeowners would be charged tap fees, which would help pay for the tower and the water system…

He suggested to the town council the creation of a separate water and sanitation authority that he will initially oversee. By doing so, [Rick Block] is expected to secure a new loan from the U.S. Department of Agriculture at an interest rate of 3.25 percent instead of the current 5 percent and pay off the current bond holders. Block said he expects to be done with his Kiowa involvement by year’s end. In the meantime, some bulk water is being sold to an intermediate outfit that is working to sell Kiowa’s water to energy companies for fracking, among other customers.

More infrastructure coverage here.

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