Perry council backs staff to pursue bond borrowing to speed urgent water projects

Matthew Ko of Cimarron Valley Engineering LLC told the Perry City Council the city faces roughly $5.5–$6 million of near-term water and wastewater needs, including water-main “kill-outs,” a booster pump station on the 12-inch loop, sludge-box improvements at the wastewater plant and several treatment-plant upgrades. “Their hope is to have, begin digging, and working by the, by October,” Ko said of a private developer’s civil schedule for related site work.

Why it matters: council members and staff said delays tied to federal loan programs could push projects past a window the city sees as urgent. Ko and staff described trade-offs between the Drinking Water State Revolving Fund (DWSRF) — which can include principal forgiveness but adds federal environmental reviews and procurement rules and an uncertain timeline — and the state Financial Assurance Program (FAP), a AAA-rated pooled bond option that would provide immediate capital after a December closing.

What was presented: Ko said the city has engineering plans or surveys ready for several sections of water main, a completed sludge-box design submitted to the state, and a capital-improvement plan identifying roughly $5.5–$6 million in projects. He outlined funding possibilities: CDBG and PREP grant applications that could provide hundreds of thousands of dollars; DWSRF principal forgiveness (which staff now expect to be smaller and slower than earlier estimates); and the FAP bond package that could provide multi‑year financing at municipal rates with reimbursement resolutions to allow reimbursing engineering costs incurred before closing.

Council discussion and direction: council members asked about project phasing, debt-service impacts and the possibility of combining borrowing with grant awards. Finance staff and the engineer said aiming for annual debt service of $300,000–$350,000 would support roughly $4.5–$5.0 million in borrowing at current estimates, with scope adjusted if grant awards arrive. Several council members expressed support for staff to prepare a FAP financing application and a clear prioritized project list, while continuing to pursue grants. No formal borrowing vote was taken; council provided direction to staff to pursue the FAP option and return with a borrowing resolution and detailed project prioritization.

Operational context: presenters emphasized recurring operational costs at the wastewater plant — including periodic lagoon cleanouts that have previously cost hundreds of thousands of dollars — and the need to reduce system leaks and expand capacity to serve planned industrial development. Ko also described water-quality blending issues tied to temporary interconnections with other sources and said staff are seeking operational thresholds and written blending rules from state regulators to protect treated-water quality.

Next steps: staff will refine the prioritized project list and bring a recommended FAP application and reimbursement resolution to council (timeline: fall/winter), continue grant applications (CDBG/PREP/DWSRF), and prepare detailed cost and debt-service scenarios for council approval.