Sean C. Morgan
The Sweet Home City Council authorized city officials to borrow up to $5 million to develop plans and construct a new water treatment plant.
The city can access up to $4 million through the State Drinking Water Revolving Fund and $1,030,000 in a Water-Wastewater Financing Loan.
The decision sets up a loan reserve account in the city’s budget and authorizes City Manager Craig Martin to sign loan documents on behalf of the city.
The city applied for the loans on the council’s approval in January. The state proposed the loan documents approved by the City Council during its regular meeting on Sept. 14.
Signing the agreement does not obligate the city to spend the funds, Public Works Director Mike Adams said. The city would need to begin paying the funds back after construction of the project, and the city continues to look for other sources of revenue.
The existing water treatment plant was constructed in 1938, Adams said. It was expanded in 1964.
“It has exceeded its usable lifespan and is suffering from structural failures,” Adams said. “A 1999 evaluation performed by Lee Engineering concluded that it is necessary and desirable to construct a new water treatment plant, river intake and disinfection contact tank.”
The existing facility is operated manually and is in violation of the U.S. Environmental Protection Agency’s safe drinking water regulations for chlorine contact time, Adams said. The city is under a “remedial order” from the Oregon Department of Health and is required to send quarterly non-compliance notices to all city water customers to inform them of the contact time violation.
The violation began occurring in the late 1990s when the regulations changed, requiring longer contact times than the treatment plant was capable.
Engineering and project management for the project is estimated at about $1 million and construction at $4.03 million.
The city is estimating an impact of $1 per month for 30 years per $1 million borrowed to pay back the loans.
The $1 million to be borrowed from the Water-Wastewater Financing Loan has a two-year payback period, which would cost rate payers significantly more than $1 per month; but those funds would be the last ones tapped.
Before the city would begin paying back that loan, Finance Director Pat Gray said, it could be rolled into a state bond fund with the longer payback period.
Present and voting to approve the loan agreements were Jim Bean, Jessica Coward, Craig Fentiman, Jim Gourley, Dick Hill, Bob McIntire and Mayor Tim McQueary.
In other business, the council:
–Approved liens against nine properties for a total of $1,252.18. The city placed the liens after property owners failed to pay bills for the city cutting grass and noxious vegetation on the properties. The properties violated city code and posed a fire danger.