SILVER SPRINGS - Silver Springs residents to be served by a new sewer system will get to pick the type of bond debt to pay for it.
Lyon County commissioners, acting as the Silver Springs General Improvement District board, set May 23 for a special election to ask voters to authorize up to $3 million of general obligation bonds.
A "yes" vote would allow the district to issue general obligation bonds through the Nevada Revolving Loan Fund for sewer projects at an interest rate of about 3.75 percent for up to 20 years and receive a grant of $97,000 for construction of the sewer.
A "no" vote would require the district to issue a revenue bond to finance the project at an anticipated interest rate of approximately 7.2 percent for up to 40 years and eliminate the grant of $97,000.
Officials made it clear that a "no" vote would not prevent the construction of the sewer system.
Representing district bonding consultants Swendseid & Stern, Kendra Follett said, "If the voters do not approve the ballot question the district has the authority to issue the revenue bond at the higher rate."
Follett said that the request is part of the original $11.8 million total funding package, but due to construction bids coming in lower than expected, the bonding need has been reduced from the originally estimated $6.1 million.
The special election became necessary when residents filed a petition requesting the district put the issuance of general obligation bonds to a vote. Costs of the election will be born by the improvement district.
Speaking in support of a "yes" vote, Commissioner LeRoy Goodman said, "A lot of other communities would like the opportunity to fund a project at these rates."
Payment on the bonds will be from revenues received from users of the system.
A sample ballot will be mailed 60 days before the election to each registered voter in the district and will describe the arguments for and against the issuance of general obligation bonds.