LaGrange working on 20-year bond for $22.6M sewer projects
The LaGrange City Council passed a budget amendment and authorized the mayor and clerk to execute a reimbursement resolution regarding water and sewer facilities at its Tuesday night meeting.
Those two items are part of an ongoing process to develop engineering plans and secure a bond from the Georgia Environmental Finance Authority that will fund water and sewer projects.
The total costs for all the projects is estimated to be about $22.6 million, which includes project costs, engineering costs and contingency, according to city Manager Meg Kelsey.
The bond is expected be paid back over a period of 20 years — Kelsey estimates the bond deal will close in April or May 2021.
GEFA is a state agency which provides loans for water, sewer and solid waste infrastructure.
Kelsey said at the mayor and council work session Tuesday morning that the city has already engaged bond counsel and communicated with Atlanta-based wealth management firm Raymond James.
The budget amendment will allow the city to take in revenue from the bond and expense it out for specific projects, while the resolution allows the city to spend money now on engineering plans, to be reimbursed with bond revenue later.
City Utilities Director Patrick Bowie had outlined the need for various water and sewer repairs and projects to city council members the mayor and council retreat in August — the total costs were then estimated at $15-16 million.
At the request of the mayor and council, the city has since added an additional $2 million to the bond plans to address infiltration and inflow (I&I) problems in the water and sewer system. Another addition was a sewer project around Hamilton Road, which has $6.7 million in capital costs alone.
“You’ll recall that … you guys gave us the go ahead to pursue some water and wastewater infrastructure projects, they were significant in cost,” Bowie said at the Tuesday work session. “So that’s why we felt like we needed to do a bond issue, rates were cheap. Now, these tend to be investments over 40, 50, 60 years or more.”
The requested projects included a new pump station at the Mooty Bridge Lift Station, a new storage basin at Yellow Jacket Station and several projects at the Long Cane Wastewater Treatment Plant, where all city wastewater ends up. City staff believed the Long Cane plant needed a new supervisory control and data acquisition (SCADA) system, a third carrousel plant clarifier to add 1-2 million gallons per day of capacity, as well as a new belt filter press and accessories.
Since the council retreat, city staff have consulted with Krebs Engineering, which determined that with I&I improvements, the Yellow Jacket project can be postponed, saving a few million dollars.
Krebs also examined the Long Cane plant and proposed putting in “flow splitting” equipment that will split incoming wastewater into five clarifiers. Krebs believes the city can save about $900,000 by implementing flow splitting.
“That was a good thing about getting some additional engineers in here with kind of a fresh set of eyes on these projects. And we’ve already come up with some pretty good cost savings,” Bowie said.
Also at the work session, Payor Pro Tem Nathan Gaskin asked if Krebs could be hired to audit the entire water/sewer system. Bowie noted the city has a master plan for the system that is somewhat outdated.
Mayor Jim Thorton said it would be nice for the city, when courting developers, “if we had a fairly recent study, we could hand to them and say, you know, if you want to develop this section of town, this is what it’s likely to cost you.”
Thornton, however, did not think such an study would be bondable, and instead would need to be included in a future city budget.