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Council approves $2.5M SRF loan application to finish water tower project
Summary
Council held a public hearing and approved a $2.5 million State Revolving Fund loan application at 3.75% for 20 years to provide gap financing for the city's water tower project; staff said the overall project budget is about $14 million and the loan would cover remaining funding needs alongside other sources.
The City Council approved submission of a State Revolving Fund loan application for $2,500,000 to help complete the city’s water tower project.
City staff explained the financing package: the overall project budget is roughly $14 million; about $10 million has already been secured through SRF funds and roughly $2 million in Economic Development Administration funds, leaving a gap the requested $2.5 million loan would fill. The loan would carry a 20‑year term at an annualized 3.75% interest rate. Staff said the estimated annual debt payment is approximately $177,000 and noted the utility’s revenue targets are structured to meet a 110% coverage requirement for debt capacity.
Council members asked for clarification on who prepared the application and how NECOG (Northeast Council of Governments) was involved; staff said NECOG compiled the application exhibits on the city’s behalf. Council asked about rate impacts and requested an updated rate-comparison briefing in the near future; staff agreed to provide updated rate information as part of the budget process. The public hearing was held as required by the SRF application process; no opposed testimony was recorded.
The council approved the resolution authorizing submission of the loan application by roll call. Next steps include submission documentation to the state and awaiting the state review timeline discussed in the meeting.
