Osage County approves $400,000 KDHE loan amendment for Sewer District No. 1

Osage County commissioners voted April 15 to approve Resolution 2025-10, authorizing a third amendment to the loan agreement between Osage County Sewer District No. 1 and the Kansas Department of Health and Environment (KDHE). The amendment increases the KDHE loan by $400,000, bringing the total loan amount to $1,548,445, and commissioners authorized the chair to sign the documents.

The amendment covers a wastewater treatment project for Sewer District No. 1, described in meeting materials as a pipe-lining project and construction of a retention pond. According to the county's presentation, this is the third phase of a multi‑phase project that staff traced back to work that began in 2015. County staff said the work for the current phase had not yet started and that an earlier scheduled start last August was delayed until project funds were in place.

“This third amendment increases the amount of the loan by 400,000 resulting in a total loan amount of $1,548,445,” the presiding commissioner said when presenting the documents and asking commissioners to sign the two signature pages supplied with the packet.

Commissioners discussed administrative steps before finalizing the amendment. Staff noted the need for excerpts of minutes from the governing board of Osage County Sewer District No. 1 to accompany the loan paperwork because the district is the borrower in KDHE documents. County counsel and staff also recommended that the county attorney's office and the county's legal reviewer read the prepared documents; a commissioner said Josh Nye’s office should review the text and provide a formal opinion before final execution.

County staff said the amendment will increase the loan amount and extend the payment schedule, and that an amortization schedule is included in the loan documents. Commissioners discussed creating a separate accounting line to receive loan payments so project disbursements and loan repayments are not confused in county ledgers.

During discussion the county also flagged administrative items that still require completion before construction proceeds: confirmation that the dedicated revenue stream for repayment is properly established and reconciled on the back end, and verification that disbursements are being collected and distributed to the correct fund. Staff said those issues will be addressed as the project moves forward.

A motion to approve Resolution 2025-10 and to authorize the chair to sign the third amendment was made, seconded and carried by voice vote. The resolution language in the meeting packet described the amendment as an execution of an amendment to the loan agreement between Osage County Sewer District No. 1 and the State of Kansas, acting through KDHE, to obtain a loan from the Kansas Water Pollution Control Revolving Fund for financing a wastewater treatment project and establishing a dedicated revenue source for repayment.

Next steps recorded in the meeting: county staff will (1) have legal counsel and the county attorney review the prepared documents and provide any formal opinion required, (2) obtain and attach excerpts of the Sewer District No. 1 governing body's minutes for the relevant motion, and (3) return executed signature pages to KDHE for county records.