Galesburg council approves $1.57 million water construction contract and 20-year loan option

The City of Galesburg on July 7 awarded a $1,566,050.40 construction contract to Balkema Excavating and approved a 20-year financing option for the Drinking Water State Revolving Fund (DWSRF) project.

Mayor Linda Marble and the council discussed updated bond figures and payment scenarios before voting. City staff reported the bond amount decreased from $3,260,000 to $2,009,000, reducing the city's contribution from $172,000 to $105,000 and lowering total repayment from $2,608,000 to $1,607,662. The staff estimate showed annual loan payments of about $98,000 on a 20-year schedule and $71,000 on a 30-year schedule; staff and several council members said the 20-year loan saves interest over time.

"The repayment amount going down to over a million dollars is a significant positive impact to the cash flow for the water fund," Marble said during the discussion.

Finance advisor Bendzinski summarized the trade-offs, and Councilor Roger Frazee urged the 20-year option. Frazee moved to approve the DWSRF loan for 20 years with a roughly $98,000 annual payment; the motion passed unanimously.

Separately, the council approved the construction contract to Balkema Excavating for $1,566,050.40 by roll call vote.

The council also heard staff recommendations that a modest water rate increase of 4% would be required to keep pace with rising costs, a figure presented by staff as part of the financing analysis. Council members discussed inflation and long-term affordability but did not vote on a rate change at this meeting.

What happens next: With contract award and loan term approved, staff will proceed with contract administration and final loan documentation. The council recorded the vote by roll call and the contract and loan approvals are effective immediately.