Catawba County plans to pay off a sewer line project debt early with a payment of $2.9 million.
In 2013, Catawba County built a sewer line along U.S. Hwy. 150 in the Sherrills Ford community. The project was paid for with an $8 million loan with a 1.81% interest rate. There is about $2.9 million remaining on the loan, according to Assistant County Manager Alison Alexander.
The county now plans to pay the loan off early, incurring an $85,000 early payment penalty, Alexander said during Monday’s Catawba County Board of Commissioners subcommittee meeting.
The loan has an estimated $130,000 additional interest if not paid off early, so the county will save about $45,000 — but that isn’t the main goal of the early payment, Alexander said.
The county wants to transfer the sewer line to the newly created Southeastern Catawba County Water and Sewer District. The loan must be paid off before the ownership can be transferred.
If the district owns the sewer line when Hwy. 150 is expanded, the state will pay for the cost of relocating the sewer line.
The county is comfortable paying off the loan with money from the water and sewer fund now because of millions in COVID-19 relief funding available for other water and sewer projects, County Manager Mick Berry said. COVID-19 relief money from the American Rescue Plan and other packages is specifically aimed at water, sewer and other infrastructure projects, so the county can use that money for any projects.
“It just puts us in a really good position to say, ‘OK, it’s not going to hurt our cash position to make future investments because of the federal dollars,’” Berry said. “We would have had to do it (pay off the loan) before we got the federal money but the federal money backfills it. So we’re in good shape.”