Lakeland Sewer Board Votes to Seek More Funding
July 28, 2016 at 4:25 p.m.
By Jordan Fouts-
The district is locked into a $23.6 million bond from the U.S. Department of Agriculture, based on a $19 million engineer’s estimate of construction costs. With the inclusion of expenses incurred since the start of the project, such as the cost of engineering work and land purchases, the district is looking at a total bill of $27.7 to $28.8 million, said Jeff Rowe, with Umbaugh and Associates.
The district cannot act on any of the bids opened last month until enough financing is secured, and they heard in previous meetings that the bids have an expiration date. They also must close on the loan by March 11, they heard in November.
“We have to request the funding or we’re dead in the water,” said board President Jim Haney.
The board voted to pursue the needed funds in the form of another USDA loan, likely at a higher interest rate than the first, or a grant. As part of the motion, they will try again to convince the USDA to use 2010 census data for the district, which would qualify the project for a 45 percent grant.
The vote followed an hour and a half of discussion on the prospects of picking up additional customers or of losing revenue as properties in the district classified as seasonal campgrounds likely sign up for a metered rate – money they will not be paying in the off-season. They also discussed the possibility of adjusting rates after they are set; refinancing their loans down the road, which Rowe said couldn’t be done for 15 years; and seeking financial help for customers unable to afford their bills, which didn’t sound promising.
They also briefly entertained the worst-case scenario – that the district goes bankrupt, the county is on the hook for expenses incurred so far and the USDA moves forward with the project anyway, likely at a higher cost and with higher user fees.
After the vote, the board heard that the rate and user ordinances will be presented at future meetings, though they do not have an actual amount to set in the rate ordinance yet. They also may hold another special meeting between the February and March regular meetings.[[In-content Ad]]
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The district is locked into a $23.6 million bond from the U.S. Department of Agriculture, based on a $19 million engineer’s estimate of construction costs. With the inclusion of expenses incurred since the start of the project, such as the cost of engineering work and land purchases, the district is looking at a total bill of $27.7 to $28.8 million, said Jeff Rowe, with Umbaugh and Associates.
The district cannot act on any of the bids opened last month until enough financing is secured, and they heard in previous meetings that the bids have an expiration date. They also must close on the loan by March 11, they heard in November.
“We have to request the funding or we’re dead in the water,” said board President Jim Haney.
The board voted to pursue the needed funds in the form of another USDA loan, likely at a higher interest rate than the first, or a grant. As part of the motion, they will try again to convince the USDA to use 2010 census data for the district, which would qualify the project for a 45 percent grant.
The vote followed an hour and a half of discussion on the prospects of picking up additional customers or of losing revenue as properties in the district classified as seasonal campgrounds likely sign up for a metered rate – money they will not be paying in the off-season. They also discussed the possibility of adjusting rates after they are set; refinancing their loans down the road, which Rowe said couldn’t be done for 15 years; and seeking financial help for customers unable to afford their bills, which didn’t sound promising.
They also briefly entertained the worst-case scenario – that the district goes bankrupt, the county is on the hook for expenses incurred so far and the USDA moves forward with the project anyway, likely at a higher cost and with higher user fees.
After the vote, the board heard that the rate and user ordinances will be presented at future meetings, though they do not have an actual amount to set in the rate ordinance yet. They also may hold another special meeting between the February and March regular meetings.[[In-content Ad]]
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