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Zion council approves application for state loan to fund lead-service-line replacements
Summary
The council voted unanimously June 4 to authorize staff to apply to the Illinois Public Water Supply Loan Program for an estimated $5,278,000 loan to replace lead and galvanized water service lines; staff said the inventory of affected lines should be complete by October 2024.
Zion’s City Council voted unanimously June 4 to authorize staff to submit an application to the Illinois Public Water Supply Loan Program to fund replacement of lead and galvanized water service lines.
Director Roberts told the council the water department is conducting a citywide inventory of lead and galvanized service lines and expects the inventory to be complete by October 2024. He said staff is pursuing several funding options and recommended applying for the state loan program, which he described as “a low interest loan with a possible up to 80% forgiveness.” Roberts said the department included design and construction-engineering costs in the loan request and identified a requested loan amount of $5,278,000 with a 30-year term.
Roberts said the city currently has about 75 known lines in inventory and that staff’s larger estimate (used in the application) was intended to ensure the request would cover higher-replacement areas if discovered. He added that if the highest forgiveness levels are not available, the city would repay the loan from the water infrastructure budget. “If we had no forgiveness, we were looking at a height of maybe 2 to 300,000 that would be taken directly out of the infrastructure portion on the line item of the water plan,” Roberts said.
Councilors asked about forgiveness criteria and likely interest rates. Roberts said eligibility and forgiveness levels would be determined in part by U.S. Census tract income metrics included with the application; he said past projects had seen rates “around 1 to 2%.” After the discussion the council voted to authorize submittal of the application.
Why it matters: replacing lead service lines reduces long-term public-health and liability risks and may require significant up-front capital. The council’s action starts the state application process; staff said final loan terms, forgiveness and the inventory’s final count will determine the project’s ultimate cost to ratepayers.
Next steps: staff will finish the line inventory, complete the loan application (including census-track documentation for forgiveness consideration) and return with any required authorizing documents for execution.
