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Council hears limits on SRF eligibility for $5.7M Phase 2 water and sewer project
Summary
City staff told the council that a $5.7 million Phase 2 water and sewer project won state and federal awards but that several construction items (notably road surfacing) may not be eligible for SRF principal forgiveness or match, likely raising local surcharges and prolonging the timeline.
The Crooks City Council heard a detailed update on the Phase 2 water and sewer project and its funding after the city’s application received combined state and federal awards. City engineer Jake reported a package of approximately $5,120,000 was submitted — roughly $3,000,000 for clean water and $2,000,000 for drinking water — plus about $600,000 in a community access grant, bringing the total project cost to about $5,700,000. The sewer portion received nearly $700,000 in principal forgiveness.
“It's a $5,700,000 project we're undertaking,” the engineer said, noting the mix of loan, principal forgiveness and grant dollars and that federal coordination produced a 0.25 percentage‑point interest reduction on the package. He advised the council that some components historically assumed to be SRF‑eligible — for example road surfacing and other reconstruction items — may not qualify under federal environmental‑review rules and could instead be treated as ineligible costs.
That narrowing of eligible costs matters for the city’s financing plan. Council members asked for a ballpark of likely customer impacts; staff cautioned the city has not finalized numbers but provided a preliminary estimate. One participant summarized that, if the full surcharge were applied without rate restructuring, customers might see roughly $20 for sewer and $14–$15 for water — about a $35 total monthly surcharge for a typical residence — though staff said they will run precise models before any ordinance is introduced.
The engineer said there is no mandatory deadline to accept the SRF package and that some communities have delayed action while they assess rate impacts; however, loan closing and coordination with bond counsel control when the city can begin drawing funds. He also emphasized that certain future matches could need to be tied to the regionalization effort and might trigger environmental review, which would extend the timetable if the city chooses that financing path.
The council did not take a final vote on project authorization this meeting; members asked staff to return with detailed rate models, alternatives that shift costs between base rates and surcharges, and written clarifications about which project elements the funding will cover.
