Saves around $33,000
By Joseph Goral
Staff Writer
jgoral@mihomepaper.com
OXFORD — The Village of Oxford voted on July 9, in favor of planning to prepay $66,038 for a bond that will be issued by Oakland County Water Resource Commission for upgrades and maintenance to the sanitary sewer system the village contributes to.
Village Manager Joe Madore wrote in a memorandum that the decision to prepay means the village would need to pay no later than Aug. 9. This amount covers the village’s roughly 0.59% use of the system.
The bond totals $11.4 million for communities in Oakland and Macomb counties, according to village documents.
Had the village chose to pay over the bond’s duration, it would amount to a total payment of $99,045 – meaning an extra $33,007 in interest costs.
Prepaying bonds has saved the village tens-of-thousands of dollars in interest, according to the memorandum.
This bond’s estimated rate is 4%, and the village is “earning about 4.5% or more on” its funds. If the village gets rates of return of 2-3%, it would be less than the cost of covering the interest cost of the bond, Madore said.
The sanitary sewer system upgrades and maintenance funded by the bond and future bonds are the same upgrades and maintenance that led to talks of potentially increasing water and sewer rates. Village council approved the first reading of a $4 sewer rate increase and a $5 water rate increase in June.