Council advances sewer-project bond ordinance as utility manager warns deadline looms

Ms. Tolliver, the utility board’s project manager, told the council on Oct. 7 that the Flowing Springs collection project is urgently needed and outlined a mixed financing plan of grants, a low‑interest Clean Water SRF loan and capacity improvement fees. “So project is desperately needed,” she said, describing recurring sewer backups, odor complaints and litigation tied to the aging system.

Her presentation laid out the financing picture: the utility’s current water debt of about $14 million and sewer debt of about $26 million; historic project cost estimates near $6.6–6.9 million; a $500,000 green-energy grant and roughly $1.0 million in economic enhancement grants; and a proposed mix of a 0.5% SRF loan, a possible higher‑interest loan as a backstop and approximately $1.3–1.5 million from capacity improvement fees. Ms. Tolliver said the SRF loan and grant terms hinged on meeting state deadlines and that bids are scheduled to be opened Oct. 15 with the utility board meeting Oct. 16 to review bid results.

Council members pressed for clarity about how much of the project is growth‑related and how much would be borne by current ratepayers. Some members expressed concern about using SIF (capacity improvement) funds and urged a stronger developer contribution. Director Maxey, newly appointed to the utility board, emphasized that development should not be subsidized by existing customers: “Development needs to pay for itself, and it will,” he said, and he pledged a joint, transparent SIF review to begin January 2025.

Council members also weighed the timing tradeoffs. Staff warned that tabling or voting down the ordinance risks losing the SRF grant and favorable loan rates — outcomes that would increase long‑term costs. The council moved and seconded the bond ordinance’s second reading and, by voice vote, advanced the ordinance toward its next step in the legislative schedule; the clerk recorded ayes and a nay but no roll‑call tally was recorded in the transcript.

The next procedural milestones: bids are due Oct. 15, the utility board meets Oct. 16, and the council’s third reading of the ordinance is scheduled for Oct. 21. If bids and board review align with the proposed funding plan, staff said the project can proceed under the favorable SRF terms; if not, the utility will face higher‑cost financing options.

Why it matters: council members framed the choice as one between protecting ratepayers from higher future borrowing costs and preserving access to grant and low‑cost SRF financing that, staff said, would reduce overall system costs. The council directed staff and the utility board to continue coordination and to provide firm bid and rate analyses before the final vote.