Refinancing could save city thousands
WOONSOCKET, RI -- With bank lending rates at record lows, homeowners have been refinancing mortgages and other debt by the droves. Now the city of Woonsocket wants to join in -- in a multimillion-dollar way.
The city is proposing to refinance some $22.3 million it borrowed from the ABN-Amro Group in 1999 to overhaul the Woonsocket Regional Wastewater Treatment Plant.

The City Council is poised to approve a resolution Monday night clearing the way for Mayor Susan D. Menard and members of her finance department to sample the marketplace for lower interest rates on the 5.95 percent note. The move could save the city thousands of dollars a year, officials say.

The measure would authorize the mayor and Finance Director Robert S. Strom to issue a formal request for proposals to refinance "the existing LaSalle Bank, ABN Amro Group lease-purchase financing of $22,285,000, plus any costs of issuance required to complete the refinancing." The resolution would take effect immediately if the council passes it.

While the existing loan was wholly a financing deal, it was also married to the privatization of the 29-year-old Cumberland Street wastewater treatment plant. The funds were put in the hands of the Palm Desert, California-based U.S. Filter Corporation, which was awarded a 20-year pact to overhaul and manage the plant.

The domestic branch of France-based corporate colossus Vivendi Universal, the world’s oldest public works company, U.S. Filter has spent millions on improvements to filtration, aeration and piping systems. Most of the improvements were sought by the state Department of Environmental Management, which sued the city in May 1999 - two months before the city awarded the pact - for polluting the Blackstone River with discharges from the wastewater plant.

"There have been a tremendous amount of improvements at the plant in order to meet compliance codes," Wayne Hitchener, a laboratory supervisor for U.S. Filter said Friday.

The plant, which serves some 70,000 residential and industrial sewer customers in Woonsocket, Bellingham and Blackstone, is working much more efficiently now than it was several years ago, according to Hitchener, who was unable to comment on the proposed refinancing.

In a memo to the City Council, however, Strom said the city is optimistic about saving money in the current market.

"Since 1999, interest rates are much lower than our original rate of 5.95% and our financial advisors and myself believe we will have the ability to substantially reduce our current rate," Strom said. "Refinancing our current lease will allow the city to save thousands of dollars annually over the term of the agreement."