Freeport council authorizes staff to pursue USDA loan to accelerate new sewer plant

The City of Freeport City Council voted to authorize the city manager to prepare and the mayor to execute loan documents to pursue a U.S. Department of Agriculture loan for a proposed new sewer plant.

City manager (Speaker 5) told the council that USDA representatives had offered application materials after a recent meeting and that pursuing USDA financing could accelerate the project. "We need about 75,000,000 for another sewer plant," the city manager said, noting the agency's loan programs could cover large portions of long-term infrastructure projects.

Staff and consultants described program features the council should weigh. A staff member (Speaker 6) said USDA loans run up to a 40-year term and reported an interest rate "under 5%" during the council discussion; the staff member added that maintaining eligibility can depend on avoiding certain private-financing arrangements that would change the city's qualification status. Staff noted State Revolving Fund (SRF) support remains a possibility and private financing could be used to fill gaps if necessary.

Council members discussed timing and the potential to shift a five-year timeline to as little as two to three years if the city can bid this summer and secure funds. Staff said earlier project design work could position the city ahead on USDA priority lists and that pay requests under USDA programs are processed incrementally rather than accruing a single large interest-bearing balance.

Council moved to authorize the city manager to pursue the USDA application and to have the mayor execute necessary loan documents; the motion carried.

The council did not set a dollar-amount limit on authorization beyond the application request; staff said the formal application and related analysis with financial consultants (PFM) will define final debt-service and revenue projections. Next steps are staff preparation of application materials and follow-up work with financial advisors.