City to pay off Water Resources Board promissory note
Ponca City Now - April 26, 2016 12:25 pm
Ponca City will pay off a promissory note to the Oklahoma Water Resource Board early, saving the city more than $155,000.
The promissory note was issued in 2009 as part of the American Recovery and Reinvestment Act, a federal stimulus program in response to the Great Recession of 2008. It funded specific projects that were ready to construct, where approximately 35 percent of the debt would be forgiven and paid with federal grant funds.
Ponca City issue such debt, amounting to $2,801,057 in projects, and received debt forgiveness of $1,010,996. Ponca City Utility Authority has been servicing the remaining debt annually since that time and is projected to have $1,421,261 outstanding at June 30, 2016. The maturity date of the note is Sept. 15, 2030.
The Water Resources Board notified Ponca City that it was refinancing the bonds, and the city was left with three options: paying off the note; continuing debt service for the original life at a slightly discounted annual amount, or reducing the term slightly with the same debt service schedule.
City Finance Director Marc LaBossiere told City Commissioners Monday night that the city has the money to pay off the note and would save more than $155,000 in gross interest, as well as improving the city’s cash flow.
Commissioners Nancy Rathbun and Mary Beth Moore, along with Mayor Homer Nicholson, approved the plan. Commissioners Ryan Austin and Lanita Chapman were absent.
The promissory note helped pay for projects such as replacing the lime softener at the city’s water treatment plant.