Columbiana approves two SRF sewer revenue warrants totaling $4.62 million to finish treatment-plant upgrade

Columbiana city officials adopted two ordinances authorizing sewer revenue warrants that together total $4,620,000 to help complete an upgrade of the city's sewer treatment plant.

City officials said the entire upgrade is estimated at about $15,100,000. The city has already received a $2,800,000 grant from the Alabama Department of Environmental Management (ADEM) funded through ARPA and previously received an approximately $2,800,000 state revolving fund (SRF) loan; those funds have been exhausted, the mayor said. The council approved two supplemental SRF warrants: $1,280,000 (ordinance O092507) and $3,340,000 (ordinance O092508).

The council discussed that the warrants are revenue obligations payable solely from net system revenues — the city's sewer fund — and not from the general fund. The documents require the city to maintain sewer rates sufficient to make debt service payments, maintain insurance on the sewer system, and meet lender conditions. The mayor summarized that both warrants bear an effective interest-and-fee cost of approximately 1.99% per annum and are 20-year SRF loans, and that the loans are issued through the Alabama Water Pollution Control Authority (AWPCA) under ADEM program structures.

Payment schedule and terms noted in the meeting: semiannual payments are due on Feb. 15 (interest/fees) and Aug. 15 (principal, interest and fees). The first payment on the new loans is not due until February 2027. The council heard that the warrants may be redeemed after approximately 10 years under the documents discussed at the meeting.

Council members voted unanimously to suspend rules and adopt the ordinances at first reading; roll call recorded "Yes" votes from council members Lilly, Maisel, Ruston, King, Phillips and Mayor Mary Mitchell. City staff said bond-closing and document signing would follow, with a signing event scheduled the day after the meeting for preliminary documents the city must execute prior to closing.

Council discussion did not include changes to sewer rates at the meeting; however, the loan documents require the city to maintain rates sufficient for repayment. Officials said the loans are separate instruments issued from different SRF funding buckets and that administrative fees are included in the annual cost calculation.

The adoption authorizes the mayor to execute the warrants and directs administrative steps needed to close the loans. The loans obligate the sewer enterprise fund repayment and include standard covenants required by state SRF programs.