|FUNDING METHOD DECIDED|
JUDICIAL CONFIRMATION FOR WASTEWATER SYSTEM 3-2-11 LMS
The Salmon City Council has decided to initiate the Judicial Confirmation process as a way of securing funds for upgrades at the city’s wastewater treatment plant. The decision was made on a vote of five to one. The upgrades are being mandated by the Environmental Protection Agency (EPA).
Judicial Confirmation can be implemented without a public vote but it does have to be reviewed and approved by a federal judge.
The other alternative would have been to hold a bond election and risk not gaining 66 percent of the votes required to pass a bond. Failure to pass a bond would mean a year’s delay of upgrades on a system that has been out of EPA and Department of Environmental Quality (DEQ) compliance for three years. Fines for not meeting standards can be $36,500 per day.
The bond election vs. Judicial Confirmation issue was debated at length during the council’s March 2nd meeting and council members agreed they would much rather have it put before voters however, given the recent history of unsuccessful bond initiatives and the fact the upgrades are federally mandated, the majority felt Judicial Confirmation was the best alternative. Councilman Jim Kluesner cast the only opposing vote.
Mayor Leo Marshall said it is important for city residents to know that monthly sewer rates should remain the same since they were put in place specifically for the needed wastewater system upgrades. The present rate structure should remain the same regardless of which funding alternative is used.
Current interest rates for a DEQ loan are from three to three and a quarter percent. The loan could be around $2 to $3 million.
There is also an opportunity for a $500,000 Idaho Department of Commerce block grant if application is made now. City Administrator George Ambrose told the council the time is ripe with low interest rates and incredibly low construction costs. He predicted that by this time next year costs will be higher.
Later in the council meeting an engineering agreement between the city and Keller Associates, Incorporated was approved. The contract is for design of a Wastewater Headworks Facility which is part of the overall upgrade required by the EPA. The contract is only for the design phase of the project. Keller will produce an initial design followed by a final design which will then be submitted to the DEQ for approval.
The estimated project cost is $400,000 to $500,000. The city has the funds available to ‘cash flow’ this portion of the project without securing any additional financing. That way the city’s sewer utility fund can remain debt free.
A Professional Services contract was then approved for East-Central Idaho Planning and Development Association Incorporated of Rexburg to handle the work involved in applying for the block grant. Ambrose explained that in order to apply the city has to be proven eligible. To be eligible for the $500,000 infrastructure block grant it has to be proven that 51 percent of the city’s residents are within Low to Moderate Income levels (LMI). The 2010 census final figures will not be available until next year. Census 2000 shows Salmon’s LMI at 47 percent. It is believed that given the current state of the local economy the community will meet the 51 percent eligibility level however a local survey will have to be conducted for purposes of documentation. The Development Association will handle the training and hiring of people to do a door to door survey. If eligibility is met the company will move ahead with the block grant application process. It will also help with Judicial Confirmation details as well as DEQ applications. If the survey shows an LMI of less than 51 percent the Development Association will research other funding possibilities.
Council approval of the Professional Services contract with the East-Central Idaho Planning and Development Association was unanimous.
That contract, as well as the contract with Keller Associates, will be funded from cash flows generated by monthly water and sewer fees.
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