To bond or not to bond?
by STEVE GRIMM
Cannon Township Supervisor
The communities that make up the North Kent Sewer Authority are currently in the process of upgrading and replacing aging components. Cannon, Courtland and Plainfield Townships have known since 2009 that the lift stations at Rogue River and Lake Bella Vista are in dire need of replacement. Preliminary engineering bids were requested and last year the engineering began.
Working through the North Kent Sewer Authority, we were able to obtain state grants that paid for 90% of the engineering, saving the communities thousands of dollars. Again using the authority, we were able to qualify for low cost bonds at an annual rate of 2.5% that would cover the costs of the repairs, while allowing us to keep our fund balances healthy. The question was then debated: To bond or not to bond?
On the one hand, it is generally a good idea to pay cash when you can, without incurring any debt. On the other hand, acquiring low cost bonds, which could be paid off early without any penalty, would allow us to keep our sewer fund balances at levels that would also allow us to handle any failure that may arise elsewhere in the system.
The Cannon Township Sewer Committee and the Board of Trustees listened intently in public meetings to those who pay sewer bills. We even put some of those residents on our sewer committee.
In the end, the discussion became part of a wider strategy to continually upgrade our system over time without having to drastically raise rates.
We also realized that inherent issues of fairness apply. One of the residents, Mark Verwys, pointed out in one meeting that by spreading the bond payments out over a number of years, those on sewer will pay their fair share, as opposed to paying for improvements out of money saved up to now. Thus, if someone moves in, they will start paying. If they move out, they will stop and the next family will take their place.
Finally, by taking advantage of the bonds, we will be able to do both lift stations now, rather than having to do one, and then save up for the next, sometime in the future—especially since the second one in line is Bella Vista. It is simply bad policy and irresponsible to forego bonding, and tell the people in Bella Vista that we will do their lift station when we have the money, and we hope the lift station doesn’t fail and contaminate the lake in the meantime.