What is Debt Service?

Debt service is the interest & principal the Authority pays, each year, on the money which has been borrowed to construct the waste water treatment system in Camden County. Besides Federal Grants which the Authority received for design and construction of the $850 million dollar system, all other funds were borrowed.

Each year the Authority pays interest and principal on the amount outstanding. This is similar to a home mortgage.

Since the system was constructed in two phases payments in early years were on half of the system’s cost. Now payments must be still made on the first half of the system cost and the second half. Imagine if your house was constructed in two phases with the first half finished in 1987 and the second half completed in 1991. Payments made at first would be on the half of the cost completed first. Then when the entire house was finished the monthly payments would increase to cover the entire cost of the house.