Wheeling Looks To Refinance Debt as Water, Sewer Projects Loom
WHEELING — City officials plan to move forward with about $8 million worth of new water and sewer projects in Wheeling this summer, and by refinancing old debts on projects that have already been completed, they hope to save hundreds of thousands of dollars in the process.
Next week, Wheeling City Council will vote on three separate ordinances dealing with bond issues pertaining to the city’s water and sewer project debt.
Overall, the city’s long-term water pollution control plan alone is expected to bring an estimated $280 million in improvement projects to Wheeling’s neighborhoods over the course of more than 20 years. These improvements have been taking place in incremental phases through sewer separations and a myriad of other upgrades, and money to pay for these different phases of projects is secured through financing of revenue bonds.
Wheeling City Manager Robert Herron said one ordinance slated for approval next Tuesday creates a project fund of about $26 million for previously identified water pollution control projects both within the system and at the treatment plant.
“We currently have the Wheeling Creek siphon project out to bid, which is a significant bottleneck for Clator and the Valley View area,” Herron said, noting that the bid award for that project should be forthcoming. “We also have the Warwood force main project, which is out to bid, and the bid opening on that is June 10. Then we’ve got about $7 million worth of improvements at the Water Pollution Control Plant, as well as the Warwood lift station, which is out to bid. The bid opening for that is June 17.”
The city and its contractors have kept busy with major water and sewer projects in recent months, including the water main replacement downtown — which is being completed ahead of the Wheeling Streetscape Project — and the sewer improvement work associated with the Bedillion Lane Project in the neighborhoods around Edgwood and Woodsdale.
City council had approved water and sewer rate increases back in April that will help generate funds to pay for the new debt the city will incur from water and sewer projects.
Two other ordinances slated for approval Tuesday will allow the city to refinance debt issued for previous infrastructure projects. In light of current interest rates, the city could see significant savings by refinancing some of the outstanding infrastructure debts, officials said.
“There is a calculation that is completed when looking at refinancing debt, and that calculation has a number of things in it — obviously interest rate is one of them,” Herron said. “If it spits out a net present value savings of 3% or better, then that prompts a recommendation for refinancing.”
One ordinance focuses on refinancing of debt issued in 2013 through the infrastructure jobs council for various sewer projects that occurred and have since been completed, Herron said. The third ordinance allows for the refinancing of the water treatment plant debt that occurred back in 2015.
The prior bonds for those projects had been issued in amounts of up to $35 million and up to $10 million, respectively.
“In both of these situations, the net present value savings is about 6% moving forward,” Herron said of the recommendation to refinance the debt. “If interest rates hold true to what they are today, that could result in several hundred thousands of dollars worth of savings to the ratepayers for both water and sewer going forward.”
For the new financing — if approved by council — the city manager said the latest infrastructure projects that are on deck will be ready to go in the coming months.
“About $8 million of that money will be ready to begin construction later this summer,” he said.