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Tonganoxie approves $5 million KDHE loan for wastewater plant expansion
Summary
The Tonganoxie City Council voted to authorize a 20-year loan agreement with the Kansas Department of Health and Environment for up to $5,000,000 at a 2.48% interest rate to fund phased upgrades that will double daily capacity at the city wastewater treatment plant.
The Tonganoxie City Council on April 7 approved an ordinance authorizing a loan agreement with the Kansas Department of Health and Environment (KDHE) through the Kansas Water Pollution Control Revolving Fund program for up to $5,000,000 to fund wastewater treatment plant improvements.
City staff described the loan as a 20-year agreement with an interest rate set at the loan's dated date. "You can see in the agenda materials that that's a 2.48% interest," said a staff member involved in the presentation. The agreement allows use of proceeds for construction, engineering and administrative costs and includes prepayment options subject to KDHE review. Repayment is expected to begin in March 2027, depending on the construction schedule and program thresholds.
The council heard staff describe the project as a two-phase effort intended to double the plant's daily capacity. "Ultimately increases the doubles the daily capacity of our wastewater treatment plant," said the city manager during discussion about phasing and regulatory planning. Staff said KDHE will require the city to affirm rates and provide a revenue pledge; the loan documents also include an ad valorem tax backstop if utility revenues are insufficient.
Staff outlined the next steps: after the signed loan agreement is returned to KDHE, the city must observe a mandatory bid-publication period (about 30 days), and staff expect to issue bid documents within roughly 30–45 days and return to council with bids in two to three months. Engineering and bid documents are being finalized with the city's engineer and KDHE staff.
Councilmember Miss Stevens made the motion to approve the ordinance authorizing the KDHE loan agreement (KWPCRF project C2306701); the motion was seconded by Councilmember Donnelly and passed by voice vote.
The council's action enables the city to proceed toward formally advertising and contracting the construction phase once KDHE signs off, begin construction in the near term and schedule semiannual repayments following program thresholds.
