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Woodland to apply $1 million reserve to water-treatment loan; staff to confirm Dept. of Ecology compliance
Summary
Mayor Todd Deinhardt said the city will use a $1,000,000 reserve to reduce a $1.6 million loan taken in 2023 for filters 2 and 3 at the water treatment plant; staff will check with the bank and Department of Ecology on amortization and compliance.
Mayor Todd Deinhardt told the council the city plans to apply a $1,000,000 reserve to reduce a $1,600,000 loan taken in 2023 to fund filters 2 and 3 at Woodland’s water-treatment facility.
Deinhardt said the loan carries a 2.25% interest rate and a 20-year amortization, while the useful life of the filters is estimated at 10 years (possibly 15 with process changes). He said the city may be technically out of compliance with Department of Ecology requirements as of February 2025 and that staff will contact the bank and Ecology to determine whether a principal payment will bring the project into compliance or whether refinancing will be required.
"That loan is for 20 years. The youthful life of those 2 filters is 10 years," Deinhardt said during the meeting. He noted there is no early-termination fee on the loan.
City staff and the mayor ran preliminary numbers showing refinancing at contemporary market rates (roughly 3–3.5%) could cost the city more in interest than retaining the 2.25% loan; Deinhardt said the differential would be roughly $10,000–$12,000 in interest costs based on current figures. He directed staff to determine the amortization implications with the bank and to confirm whether a $1,000,000 principal payment would meet Department of Ecology compliance.
Terry Smith (budget staff) told council the city will budget to continue making the same periodic payment so the loan is paid earlier rather than lowering the budgeted payment. Deinhardt and staff framed the move as debt management that could improve the city's standing for future grants because lower outstanding debt can improve grant scoring.
No formal vote was taken; staff were directed to consult the bank and the Department of Ecology and to return with a recommendation on whether to apply the reserve, refinance, or take other actions.
Ending: Council asked staff to report back with written guidance from the bank and Department of Ecology before any principal payment or refinance is executed.
