From The Mountain Mail (Casey Kelly):
Though improvements to the new Salida Wastewater Treatment Facility will not be fully completed for another couple of months, the city has begun treating wastewater at the new plant. The new facility began treating city water in November, and since then the city has been working to finish remaining improvements at the facility, Wastewater Plant Manager Randy Sack said Friday. Remaining improvements at the facility, which Sack said should be completed in the next “couple months,” include work on landscaping, the driveway, curb and gutter, phone and data lines, and painting.
Moltz Construction has been working on the new facility for the past 13 months, Sack said. “It’s working really nice,” he said. “It’s a little bigger. It’s doing a great job with the things we need it to do.”
Sack also said the new plant is all computerized, which allows easier monitoring of its operations. The previous plant was no longer meeting regulations for wastewater plants, City Administrator Dara MacDonald said. The plant was out of compliance with regard to levels of ammonia and biochemical oxygen demands, which Sack said “measure the organic strength of the wastewater.”
Sack said once the final improvements are made to the facility, the city plans to host an open house to invite the public to tour the new facility.
Sidebar on financials
The total cost of the Wastewater Treatment Facility upgrade project is $17.6 million. The project is being financed through a $12.1 million loan from the U.S. Department of Agriculture, a $1.35 million Department of Local Affair grant (with matching funds from the city) and a $2.6 million USDA loan the city received in 2009. The city will make its first payment on the $12.1 million loan in fall. The term of the loan is 40 years with an interest rate of 2.5 percent. At the time financing was originally approved, the interest rate was set at either 3.25 percent or the rate in effect at the time of the loan’s closing, whichever was lower. When the loan closed in February, the city secured the lower 2.5 percent interest rate. The city is required to make a minimum payment of $480,405 each year, but can make higher payments to lower the amount of total interest paid over the life of the loan. If the city makes only the minimum payments, it will pay $7.1 million in interest over the life of the loan.City Finance Director Jan Schmidt suggested at a February city council meeting that the city make payments that assumed the previous higher interest rate, which would have the city paying off the loan 8 months earlier and paying less money in interest.
City Administrator Dara MacDonald said when the city adjusted sewer rates, it was done in anticipation of the facility upgrade and the debt service that would come along with it. MacDonald said revenue from the city’s sewer enterprise fund is projected to cover the cost of the annual payments, along with the plant’s operation and annual maintenance costs.
Total 2012 revenues for the sewer fund came in at $1,444,641, and total expenditures, which included capital outlay costs for the facility’s construction this year, came in at $8,978,716. Excluding the one-time capital outlay costs this year, the sewer fund had $748,933 in expenditures, which would have resulted in net revenues of $695,708, enough to exceed the cost of the minimum annual loan payment.