The city of Clintonville may address all of its needs at its Wastewater Treatment Facility at one time.
That was the recommendation of Interim City Administrator Chuck Kell at the March 16 council meeting.
“I think the community has an absolutely wonderful opportunity to make some major improvements in your city’s infrastructure with this program and the Rural Development grant program,” Kell said.
Kell said it would cost $10 million if the city addressed all the items that need to be addressed. If the city went that route, Kell said the city has a preliminary commitment for a $2.5-$2.8 million grant from the Rural Development agency for the project. This grant would not have to be repaid.
Kell told the council the DNR will only give the city a 20 year loan at 2.25 percent for the project.
Using a $7.5 million project as an example, and paying that back over 20 years, Kell said the monthly cost to residential customers in the city would be $35.33.
For a $10 million project, the monthly fee would be $41.27 per month.
Under those two scenario’s the entire cost of the project would be funded by a loan.
Residential customers currently pay $27.60 per month. That figure is based on usage of 4,000 gallons of water per month.
Using the Rural Development loan and grant program, the rate would be about $29.33 per month for a $10 million project. The grant wouldn’t have to be paid back, but the loan would be for 40 years.
“That’s the one concern I have, and I think the council needs to discuss this,” Kell said.
Kell said the reason the loan has to be 40 years is the agency is giving the grant to keep the customer rates in line with what they can afford. A shorter payback period for a loan would mean higher monthly rates.
With the use of grant money, the monthly increase would be $1.73 for residential customers.
Kell said there is no pre-payment penalty for the loan.
“With this program we’re basically talking about addressing almost all of the main improvements that need to be made at the treatment plant,” Kell said.
Moving the tank from the airport to the treatment plant site could also be addressed with this project, as well as the sewer replacement on Main Street.
Kell said he’d also recommend having city department heads recommend more major sewer or water replacement projects in the community where the main problems are. He said under this program, the sewer replacement is covered, as well as 50 percent of the cost for road replacement if a sewer or water project is done.
More projects were recommended because if the total cost of the projects doesn’t equal the amount the city applies for, the grant money is pulled back first, Kell said.
Kell said even if the city submits an application for the program, it can still decided not to move forward with it. The application is due April 1.
Kell recommended the city contact its financial advisors and look at alternatives as to how this would be funded over time.
The council unanimously approved moving forward with an application to Rural Development for a $10 million project.