Soldotna looks to apply for loan for wastewater treatment plant

The Soldotna City Council has authorized the City Manager Mark Dixson to apply for a loan for $3,000,000 to finance construction of the 2017 wastewater treatment plant improvement project.

In conjuncton, the council also increased estimated revenues and appropriations in the utility system capital improvement fund by no more that $3,000,000, anticipating the funds from the Alaska Department of Environmental Conservation.

The loan is part of the Alaska Clean Water Fund and would cover the financing of the 2017 Wastewater Treatment Plant Improvement Project, according to Soldotna Public Works Director Kyle Kornelis.

“This consists of several projects,” Kornelis said. “The appropriation will allow us to complete several imporatant projects (at the wastewater treatmenat plant).”

The different components of the overall improvement project include new blower motors, new motor control cabinets, repairs to yard piping that is currently leaking, repairs to the control building, a new roof on one of the buildings and several code compliance upgrades to buildings throughout the treatment plants, Kornelis said.

“The loan program is favorable for a number of reasons, incluidng excellent interest rates,” Kornelis said.

The program also provides flexibility, such as being able to pay off the loan early, variable loan terms and reimbursement for existing and prior expenditures.

According to the Department of Environmental Conservation’s loan program overview, the loans can finance up to 100 percent of a project’s costs for planning, designing and constructing publicly owned facilities. For a contract term of five to 20 years, Soldotna would see a 1.5 percent finance charge assessed starting one year after the first payment to the city. If the contract term is less than five years, Soldotna would see a 1 percent finance charge on the same timeline.

The application process begins in January 2018, according to city documents, and if accepted, the funds would become available between June and September of 2018.

“In the history of the loan program, they have never not been able to provide financing to a loan applicant,” Kornelis said. “So, the prognosis is very good. … The sole purpose of this loan is a project of our type. … It fits the mold perfectly so we feel there is very little risk that we will not be able to get the loan.”

If, though, the city is not approved for the loan Soldotna would need to find alternate financing to pay for the expenditures.

The Soldotna wastewater treatment plant collects waste water from about 29 miles of sewer lines, serves about 4,000 people and is designed for a capacity of 1.2 million gallons per day with a maximum flow of 1.08 millions gallon per day.

In 2001, Soldotna updated its wastewater facilities master plan, which recommended upgrades that were installed in 2006.

Reach Kat Sorenesn at kat.sorensen@peninsulaclarion.com

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