SOUTH WHITLEY — A full house greeted South Whitley Town Council members Tuesday evening for a public hearing regarding Phase II of the wastewater treatment facility project.
The town has applied for a $600,000 grant from the Office of Community and Rural Affairs (OCRA), which is the maximum amount allowed by Region-III-A.
The town’s grant administrator and Region-III-A representative Angela Hoffman told those gathered that the preliminary engineering report is in the finishing stages and the proposed cost of the project is $3.5 million.
Phase II includes upgrades to the wastewater treatment plant by enlarging the main water inceptor along Water and Main streets, constructing a headwaters work building, and a new electrical building on an adjacent property. With a financial plan for the project already developed, the town plans to apply for a $2.9 million loan from the State Revolving Fund.
Hoffman also noted that there was a change in costs from what was in the published legal notice. The town will be seeking bonds for $2,980,000, according to Hoffman.
According to past rate studies, Hoffman said a 4,000 gallon average (water) user is currently spending $36.28 with the town’s current ordinance for a monthly billing. With the grant the town is currently applying for, there would be a 52 percent increase in billing bringing this total to approximately $55.32 a month for sewage services.
“Without the (OCRA) grant, an average user is looking at somewhere between 65 to 78 percent rate increase on sewage services,” Hoffman said.
Hoffman also reminded resident that the project is an unfunded mandate from the state, and if the town does not comply it will face significant fines.
“What is going to determine whether we get the grant or not?” South Whitley resident Jim Howard asked.
Hoffman explained that across Indiana there are regional districts, numerous towns and cities who apply for these type of grants, all based on various factors. One example is low- to moderate-income families with South Whitley rated at 65 percent in this category which is a contributing factor in the grant application.
“The sewer alone just being at $55 a month pulls a lot for the grant,” Hoffman said.
“When will the town know if the application was accepted?” South Whitley resident Jack Thomson asked.
Hoffman said awards are determined in May with two months processing and construction to begin in August.
“Does the contractor have the right to increase the price?” Thomson asked.
Project manager David Harvey with Fleis and Vandenbrink was in attendance and explained how the contingency costs are built into the budget.
“It (monthly sewerage billing) could also be lower?” Thomson asked.
“Yes, it could also be lower,” Harvey said.
Engineer Nathan Anderson, also with Fleis and Vandenbrink, explained funding details on the Phase II project.
“We have a partially combined sewer system that storm water flows and sanitary flows go into and currently during storm events, raw sewage is discharged into the (Eel) river,” Anderson said. “Although this was an acceptable practice previously, IDEM is mandating closure of all these overflows.”
If overflows are closed, storm water goes through the wastewater treatment plant (or a storm water system) for larger storms which creates improvements for the treatment plant facility.
“When you close overflows during storm events, all that water has to go somewhere so it has to go through the plant for treatment,” Anderson said. “Depending on whether it’s a large storm or a small storm, dictates the level of that treatment.”
If the project is not completed by Oct. 31, 2012, IDEM will then issue penalties.
“In the past, long-term control plans, the town has looked at this over time and various solutions were identified to minimize that storm flow going through the system that would ultimately go to the treatment plant,” Anderson said. “The more you reduce the storm flow coming into the collection system, that is the less you have to treat at the treatment plant and the smaller improvements at the treatment plant, the lower your (town‘s) rate increase.”
Phase I of the long-term control plan separated some combined sewer which will lessen the amount of water that will need to be treated at the wastewater plant.
“The storm waters could then go into the river and not the wastewater treatment plant which minimizes the upgrades,” Anderson said. “What is proposed includes disconnecting all downspouts and storm inflow connections if there were like private yard drains which greatly reduces the storm flow to the plant.”
IDEM also requires disconnection of any downspouts to the system which the council is currently modifying in the sewer ordinance.
“Generally, if the downspouts disappear into the ground, that means they are hooked directly into the storm system, or combined sewer system,” town attorney Greg Hockemeyer said.
Assisting with the town’s funding for Phase II is Jeff Rowe with Umbaugh and Associates who provided historical documents to council members showing the last rate adjustment in 2008.
“I feel the existing rates are adequate,” Rowe said. “So over the last three years the utility generated enough revenue to meet the current operating expenses and to also pay the debt service payments on the outstanding bonds.”
Rowe said the town is in a good strong cash position with notice of bids to be published at a later date and awarded to the lowest bidder. Total non-construction costs range from $502,000 to $542,000. These costs include engineering inspection, preparation of the preliminary engineering report, grant administration, bond council and financial advisory.
“So the project is estimated at anywhere from $3.541 to $3.581 million, depending on the outcome of the grant,” Rowe said.
In conclusion, bond counsel Sue Beesley, a partner with Bingham and McHale attorneys-at-law, provided standard forms for the State Revolving Fund (SRF) which outlined all the parameters of the loan.
“The forms have a lot of words, but simply say we (the town) want a loan,” Beesley said. “I have heard a lot of numbers thrown out here tonight and with the SRF you only pay for what you borrow, if bids come in lower, you only pay that amount.
Bond approval was unanimously approved by all three council members.