From The Greeley Tribune (Trenton Sperry):
At its regular meeting this week, the council introduced an ordinance allowing the city to sell $7.5 million in bonds in May. The bond revenues would be used to fund improvements to the city’s sewer system, marking Greeley’s first issuance of sewer debt since 1994.
Greeley’s annual debt payments — estimated at $550,000 for the next 20 years — would be funded by current sewer user fees, according to the ordinance.
Victoria Runkle, Greeley’s finance director and assistant city manager, said rate increases for Greeley’s sewer customers may be on the horizon, but they would adhere to the city’s current rate schedule, which raises rates by about 2 percent to 3 percent each year.
“We assume we will have to raise rates over time,” Runkle said. “Will that actually come to pass? That will depend on if revenues continue as they are. There have been years when we didn’t raise rates.”
In a draft of the bond project’s official statement, the city claims Greeley’s single-family residential customers paid less for sewer services than 17 of 24 Front Range municipalities surveyed in fall 2014. However, the city will be required to raise rates, fees or charges to balance debt payments as needed.
The bonds are being considered to help Greeley make needed upgrades to the sewer system more quickly, Runkle said.
“We’re not earning enough interest on the money we have in cash funds,” she said. “Interest rates are very low. We’re only able to make about 2 percent on cash reserves, but construction costs are up to 4 or 5 percent.”
Portions of Greeley’s sewer system date to 1889, according to the ordinance, and about 4 percent of the current system is more than 100 years old.
More infrastructure coverage here.