EVANS CITY — The borough’s water and sewer authority will refinance a 2013 bond issue, but the borough council is on the hook for the payments in the unlikely event that the authority defaults.

The council at its Monday night meeting voted unanimously to approve an $8.9 million bond issue that should save $125,000 over the life of the loan.

The refinancing was pursued as a money-saving plan and is not being issued for any specific capital improvement project, said borough solicitor Sean Gallagher.

Gallagher said the authority received an excellent rating for the bond issue, which was based on the borough’s finances.

That rating provides the optimum interest rate on the bond.

Borough council will guarantee the bond, which means it will pick up the payments if the authority defaults on the loan.

“Given the authority’s current status, we don’t expect any problems,” Gallagher said.

The new bond issue will expire in 2043.

Council Vice President Kim Armstrong said the council is responsible for guaranteeing loans taken out by many borough entities, including the EDCO Park Authority, Evans City Public Library and the Evans City Volunteer Fire Department.

She said the council’s work to decrease its financial burden has resulted in the sewer and water authority receiving an “A” bond rating.