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La Plata adopts $7.56 million bond package to secure USDA loans for sewer Project 1
Summary
The La Plata Town Council on Aug. 12 adopted Ordinance 25-07 authorizing up to $7,562,000 in general-obligation bonds to secure two USDA loans for a wastewater infrastructure initiative called Project 1. The council and staff said debt service will be covered primarily by major facility fees and that the action does not change the town's tax rate.
La Plata Mayor and Town Council adopted Ordinance 25-07 on Aug. 12 authorizing two general-obligation bonds, not to exceed $7,562,000 in the aggregate, to secure United States Department of Agriculture loans for Project 1, a set of wastewater infrastructure upgrades that includes a Southwest Quadrant regional sewage pumping station, new 24-inch gravity sewer mains, 12-inch water reuse piping and treatment-plant module upgrades.
Town Manager Chuck Stevens told the council the bonds would be split into two issues, one up to $4,842,000 and the other up to $2,720,000, each amortized over 40 years with interest rates locked at up to 1.75% and 2.75% respectively. "The town is not dependent on any future collections of major facility fees as there are sufficient funds available to service the debt," Stevens said. He and staff emphasized the town can prepay the USDA loans without penalty.
The staff report said major facility fees—impact fees charged to new development—are the primary source planned for debt service, and that using the USDA financing preserves the town's reserves and takes advantage of locked federal interest rates. Stevens told the council the town expects to earn more in investment income on its reserve balances than the interest cost on the loans given current market conditions.
Council members asked for clarifications about capacity and timing. Stevens said the wastewater treatment plant is currently rated for 1.5 million gallons per day and is built and designed to move to 2.0 million gallons per day; staff will present a more detailed system-capacity analysis on Sept. 9. Stevens also said components were at the end of useful life and would require replacement regardless of financing choice.
Lindsay Raider of Funk & Bolton, the town's bond counsel, and the town's volunteer finance committee reviewed the loan terms and recommended proceeding; the staff report and presentation were included in the council packet. At the ordinance's second reading the council voted by roll call to adopt the measure. The mayor and all councilmembers recorded an "aye" in favor of adoption.
The ordinance authorizes the town manager to execute documents related to the bond issuance and USDA loans and pledges the town's full faith and credit, with debt service payable in the first instance from sewage system revenues but with the option to be paid from other legally available sources.
Council members said the financing allows the town to address critical infrastructure needs while preserving long-term fiscal flexibility and avoiding higher-cost commercial borrowing. Staff said the project is included in the adopted 2026 budget and aligns with the town's comprehensive-plan goals for wastewater and growth-related infrastructure.
