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Commissioners hear financing options for Bucyrus sewer project and small wastewater systems
Summary
Finance director and commissioners discussed the Bucyrus wastewater project, KDHE loan underwriting, external funding sources and the financial limits of small, stand-alone sewer systems for low-population subdivisions.
Miami County commissioners and Finance Director Lucas Mellinger discussed the county's small wastewater systems and the recently completed Bucyrus replacement project, focusing on funding sources, ongoing maintenance and long-term viability.
Mellinger said the Bucyrus project is part of a larger set of small wastewater systems that the county oversees and that permanent financing for the project will depend on total cost minus external funding. "Next week, we'll have the loan agreement" for KDHE financing, he said, and estimated the county's loan portion at roughly $550,000 to $600,000 while placing the full project cost at about $4,400,000.
Why it matters: Mellinger warned that many small-scale sewer systems are not financially sustainable on user fees alone and that the county has limited ability to charge homeowners enough to amortize a full replacement in the 25- to 30-year lifetime of these systems. He recommended against approving new small standalone sewer systems in the future on fiscal grounds.
Key points - Funding mix: Mellinger outlined the external funding sources the county is pursuing for the Bucyrus work: KDHE small-systems funding (about $1.5 million), CDBG (about $300,000), USDA/rural-development construction financing and $1.25 million from county ARPA funds. The remaining balance would be permanent KDHE financing and local contributions. - Loan estimate and project scale: He estimated a KDHE loan in the range of $550,000'$600,000 for the county's portion and stated a total project cost of about $4.4 million. Mellinger described next-week steps for the loan agreement and said bond counsel would review documents as requested by the county counselor. - Small system sustainability: Commissioners and staff discussed Walnut Creek and Club Estates sewer systems. Mellinger said most county sewer funds cover day-to-day maintenance; Walnut Creek and Club Estates cover operations under current fees, but fees do not allow for capital replacement. "Will we ever have enough money based on the fee that we're charging these individuals to redo the system in 15 years when it goes belly up? No," Mellinger said. - Operational implications: He said the Bucyrus replacement required roughly 4.5 miles of piping to Spring Hill for discharge in that project and noted that other systems like Walnut Creek use sand-filter or return-activated sludge processes where homeowners maintain on-lot solids-handling equipment and the county manages effluent treatment.
Context and next steps Mellinger said USDA and Spring Hill collaboration made the Bucyrus financing feasible and that the county must continue relying on multiple external funding sources for small sewer projects. He recommended caution on approving future standalone sewer systems and said staff will continue loan documentation work and follow-up financing steps.
Ending Commissioners asked staff to keep tracking fee structures, reserve balances and potential connections to nearby treatment plants as county staff continue to finalize KDHE loan documents.
