City Attorney Traci Lawson informed the council there is a need to build the city's debt reserve back up for upcoming projects, and Old National Bank had proposed the restructuring of payments on the Guaranteed Savings Performance Contract with Energy Systems Group, LLC.
The contract was entered into in 2006 for upgrades and improvements at the Wastewater Treatment Plant, and included a change order in 2007, for a total cost of slightly more than $2 million.
The Brazil Board of Public Works and Safety passed the resolution and amortization (Payment) schedule in a meeting Friday.
The payment schedule proposed by Old National Bank included interest and smaller principal payments, maxing out at $29,500, every six months through 2017, at which time the current 2004 Sewer Bonds will be paid off. Then, in 2018, the city would then make principal payments of more than $519,000 in January and July to close out payments. Recently, the city had been making payments of $115,736 every six months.
"It seems like a big jump in that last year, but current payments on the sewer bonds are about $485,000, so along the course of the amortization schedule, the city's debt service payments are pretty even," Lawson said about the proposal, which is for a six-year term with a 5.3-percent interest rate. "Old National Bank provided seven payment schedule options, and this is the one that would work best for the city."
With Pat Heffner and Brad Deal not in attendance, the council passed the resolution with a 3-0 vote, which allows the city to make the July 2011 payment, which according to the schedule is for interest only.
The next meeting of the Common Council of the City of Brazil will be 7 p.m., Wednesday, July 27, in the Council Chambers of City Hall. General business, including animal control, will be discussed.