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Warren Council approves $100 million SRF bond package for wastewater treatment project
Summary
Warren City Council voted to authorize issuance of $100 million in State Revolving Fund junior-lien revenue bonds at about 2% to finance upgrades to the wastewater treatment plant after bids exceeded an earlier $75 million estimate.
Warren City Council on July 22 approved an ordinance to issue $100,000,000 in State Revolving Fund (SRF) junior-lien revenue bonds to finance improvements to the city nd wastewater treatment plant, including the incinerator project.
The action follows bids that exceeded the city nd initial $75 million SRF authorization. City Controller Richard Fox told the council the state had additional funds and the project was approved for $100 million at roughly 2% interest; bond counsel and financial advisers described a 30-year amortization with the first payment deferred until operations begin. Bond counsel Ronald Liscum said the program delays the first payment so it aligns with project completion. Financial adviser Stephen Burke told the council the SRF route saved the city roughly $74,000,000 in interest compared with a public-market sale.
Why it matters: the project is a large capital upgrade to the water and sewer system. Using SRF financing produced far lower interest costs than a typical municipal bond sale, and the council pproval allows the city to move forward with contracts and construction financing under the state program.
City Controller Richard Fox summarized the change: "There was confusion in this, parks and recreation is a separate 1. This particular revenue source is the is through HUD and the for ADA compliance. So it's just recognize putting the fund together and putting the revenue in there." (Fox's explanation was in the adjacent grants discussion; on the SRF financial details Stephen Burke and Ron Liscum provided technical comments.) Bond counsel Ron Liscum explained timing: "The bonds were set up to mature over 30 annual payments, but the first payment would not be beginning until 2029." Stephen Burke of MFCI added that the state's SRF program combines federal and state funds to provide low-cost financing for water and sewer improvements.
The council voted to adopt the required ordinance and move forward with selling bonds through the state program. The council recorded a unanimous vote to approve the ordinance.
Next steps: bond closing and formal SRF documentation follow; the city will proceed with procurement and contract awards under the project budget and SRF terms.
