Virginia Explores Debt Refinancing Options for Small Communities

 

The Virginia’s Department of Health’s Drinking Water Program sections on capacity development, sustainability, and the DWSRF have been investigating cost saving options for smaller communities through debt refinancing.  As reported in the Spring 2015 edition of STREAMLINE, the Virginia Rural Water Association’s magazine, in today’s economic climate, refinancing old municipal debt may provide the means for significant cost savings for many smaller communities.  For many of these communities, debt service represents a significant portion of their operating budget.  As an example, the article cites the efforts of the Russell County Public Service Authority.  Located in the southwestern part of the state, the county-wide population is around 28,000.  In 2014, the PSA refinanced $3.64 million in capital improvements debt through the state’s DWSRF program.  The result has been an annual savings of $64,470 – an amount equivalent to 5.8 percent of the annual drinking water operations budget.  While such an approach cannot work for every small community, it is an option that should be considered when looking for ways to lower expenses.

ASDWA suggests that state capacity development coordinators take a look at the complete VRWA STREAMLINE article to learn more about how this option is being implemented in Virginia.  You can download the article at http://www.nxtbook.com/naylor/VRWQ/VRWQ0215/index.php#/28.

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