KEY LARGO -- With the prospects of securing state funds to pay down debt growing increasingly doubtful, the Key Largo Wastewater Treatment District's board decided last week to refinance a $20 million loan to secure a lower interest rate.
The move should save about $1.8 million through 2017, according to Paul Christian, the district's chief information officer.
Key Largo was initially promised $20 million earlier this year from the $200 million state Mayfield Grant, which the district intended to use to pay down debt. But state legislators failed to include the funding in the 2013 budget, and Gov. Rick Scott declined to add it, saying only shovel-ready projects were eligible.
Scott's office is now tentatively agreeing to give Key Largo $17 million in 2014 but the stipulation for job-creating projects remains. Most of the Key Largo's sewer system is complete, and the district is carrying about $80 million in debt.
For months, Peter Rosasco, the district's accountant, has recommended that the district move forward with refinancing the loan.
"If we would have found out we were getting the Mayfield money the day before closing on the loan, we would have still closed," Christian said.
To secure lower interest rates, the district is taking out two separate loans for $10 million -- one this month and the other in January. A government entity that only borrows $10 million in a calendar year is eligible for lower rates, Christian said, so the district decided to act before Dec. 31.
The district's chief, Margaret Blank, said ratepayers will not see any rate changes. Eventually, though, when construction assessments drop off and the district's only income is user fees, monthly rates could rise, she explained. The average residential bill is about $60 per month.