Streetsboro -- The city has acquired $3.475 million worth of bonds to pay for a water tower at the old Carter Lumber site on Route 43, according to Mayor Glenn Broska.
The bonds were purchased for a 19.2-year term, and the city will pay about $275,000 a year, Broska said. The final payment is due in 2032.
The bonds will be paid back using water department revenue, he said.
In addition, the city acquired $3.67 million worth of bonds to replace the short-term notes taken out to pay off the city's debt on the Steffner property on Route 303, which now is Thomas Heritage Park. The bonds were purchased for a 17.2-year term, and annual payments by the city will be about $305,000, Broska said. The $4.6 million purchase of the 116-acre property was required as part of the settlement of a zoning related legal complaint between the city and former land owner Raymond Steffer.
"The way the interest rates are going, we didn't want to get stuck paying higher rates," said Broska, explaining the reason for the bond purchase. The final payment is due in 2030.
The bonds were acquired Aug. 29 and locked in at a 4.04 percent rate, Broska said.
"We're on the right track. We're doing well," said Councilman Chuck Kocisko. "As a city, we're in pretty good shape, financially. The mayor has done a good job."
Broska said he doesn't favor exhausting the city's water reserve fund, which has a balance of about $2 million, to pay for the water tower.
"I don't want to devastate that water reserve fund to pay off the water tower when we have these other needs pressing that we are going to be responsible for," said Broska.
Those "other needs" include installing and replacing a variety of water lines around the community, he said.
Kocisko said both the water tower and the water lines are important.
"We need this water tower for safety and because people's wells are drying up," he said. "But I really want to move on these water lines once we get this water tower in."
The water tower should be completed by the fall of 2015, Broska said.
Broska believes the water tower will provide several benefits.
Currently, the city is served by a pipeline from a field of wells in Shalersville that is operated by Portage County.
"If something happened to the main line, it would put us in a world of hurt," Broska said.
The water tower would allow the city to store water.
"It gives us a safety net as far as available water," he said. "It will stabilize the water pressure and give us better water pressure throughout the city. It will enable us to continue to expand our water network in the city. Our eventual goal is to have the entire city on city water instead of relying on well water. Some people prefer wells, but that is up to them."
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