With the assistance of representatives from H.J. Umbaugh and Associates, Indianapolis, the city was able to obtain a $5,930,000 loan for the water projects through the Indiana State Revolving Fund Loan Program (SRF).
Through this process, Umbaugh and city officials also analyzed other outstanding loans within the Waterworks Utility.
The utility currently has an outstanding Waterworks Revenue Note of 1994, along with a Waterworks Bond Anticipation Note, Series 2009, which totaled $497,679.
However, other steps had to be taken in order to get the city to the point it is now.
"It was not a simple process," Mayor Ann Bradshaw told The Brazil Times. "There was a lot of time, thought and effort put in by many people to make this happen."
One of the biggest factors was the decision to place the bonds for the projects with the SRF Loan Program rather than selling them on the open market.
Then, at the May 12 meeting of the Common Council of the City of Brazil, an ordinance was passed allowing the SRF and other current loans to be consolidated, which allowed the debt service more level, along with setting a fixed interest rate of 2.92 percent on the SRF loan.
According to the report recently submitted to the city by Umbaugh, these moves will save the city an estimated $1,487,005 in gross interest costs on the loans. Umbaugh came to this determination by using an assumed market interest rate scale across the 20-year term of the SRF loan.
When averaged out, the estimated yearly savings would be approximately $74,350, which Bradshaw was glad to see.
"It may not sound like a lot when it is broken down year-by-year," she said. "But with all the cutbacks and budget issues across the board due to the economy, every little bit we can save while completing these projects is a huge benefit."
Bradshaw added the savings would affect the utilities portion of the city's budget, not the General Fund.
Finding out the savings in interest on the loans was just the most recent bit of good news for the city regarding the upcoming water projects.
Along with the SRF loan, the city also received a $2,222,872 grant from the Indiana Office of Community and Rural Affairs for Community Development Block Grant funding under the Disaster Recovery Fund, meaning the city had a total of $8,152,872 in funding for the projects.
Recently, the city announced bid awards for the work on the projects, which came in much lower than anticipated at a total of $5,451,019.70. The awards included work on alternate projects allowing for the replacement of 1,000 water meters, an additional hydrant replacement and water main work in the I-70/Frontage Road area.
"We have been very fortunate that the bids came in lower than we thought they could be, long with being able to do the additional projects," Bradshaw told The Brazil Times. "Finding out that consolidating these loans will save the city so much money in the long run is like icing on the cake."