2014-10-02 / Front Page

City to double capacity of treatment plant


The Lincolnton City Council approved a $6.2-million project to upgrade and expand the wastewater treatment plant with a grant and loan administered by USDA-Rural Development (RD). Watching as Mayor Henry Brown (seated) signs the resolution for the loan are (l-r) Councilman Ernie Norman; Kathy Ross, area USDA-RD director; Councilman Alana Burke; Kenny Green, an engineer with G. Ben Turnipseed Engineers; and Councilman Larry Goolsby. The Lincolnton City Council approved a $6.2-million project to upgrade and expand the wastewater treatment plant with a grant and loan administered by USDA-Rural Development (RD). Watching as Mayor Henry Brown (seated) signs the resolution for the loan are (l-r) Councilman Ernie Norman; Kathy Ross, area USDA-RD director; Councilman Alana Burke; Kenny Green, an engineer with G. Ben Turnipseed Engineers; and Councilman Larry Goolsby. The Lincolnton City Council approved a $6.2- million project to upgrade and expand the wastewater treatment plant using a grant and loan, administered on behalf of the federal Rural Utilities Service (RUS) by the state and area USDARural Development (RD) staff.

The action was taken at a called meeting of the council held Monday, September 29.

After Kathy Ross, area director for USDA-RD, went over a letter of conditions with Mayor Henry Brown and the council, the mayor signed a resolution for a $1,124,000 loan from USDA-RD. The document stated that the city will do everything it can to meet the requirements specified in the letter of conditions, including raising sewer rates to service the debt.

The interest rate on the 40-year loan is estimated at 2.375 percent for planning purposes.

The grant portion of the project amounts to $4,573,000.

In her remarks, Ross said, “With the government’s fiscal year ending September 30, we were able to tap into federal reserve funds to be able to do this project in FY 2014.

“A lot of players and information had to come together to get an initiative like this off of the ground. I’d like to thank everyone who had part in it.”

She went on to say that the city must spend the loan first.

The first payment will be due one month after the loan closes. Using the 2.375-percent interest rate and an amortization factor of 3.23, the city’s monthly payments will be $5,569.

Moreover, Ross indicated that the city must establish a debt reserve fund by making monthly deposits of $557 (10 percent of 12 installments of principal and interest on the bond) until the amount needed to pay 12 loan installments has been accumulated.

In addition to the debt service account, the city must fund a shortlived asset replacement reserve by depositing a sum of $10,400 annually for repairs.

Also, for the first couple of years, extensive audits will have to be conducted due to the size of the project.

In other comments, Ross said, “The city must maintain a rate schedule that provides adequate income to meet the minimum requirements of operation and maintenance, debt services, and reserves. User rates must be in place that would project annual sewer revenue at a minimum of $387,972 before the loan closes or construction begins, whichever comes first.”

This is the minimum revenue needed to support debt repayment, pay operating costs, debt services, and so forth.

Ross added, “There are no environmental issues, but if the contractors come upon one, such as flood lands or wetlands, they will have to notify the appropriate authority.”

Likewise, a full-time resident inspector is required unless an exception is made upon the city’s written request.

The steps of the project are as follows:

(1) Project design.

(2) The plans are approved by the USDA and the EPD.

(3) The project is bid out.

(4) The engineer sends the budget to the USDA, which certifies the budget to ensure there are enough funds to complete the project.

(5) The bonds are validated by the USDA.

(6) Construction starts, and the city can begin to draw down funds.

“It will be about a year before construction actually begins and probably 15 months before it is completed,” according to Kenny Green, an engineer from G. Ben Turnipseed Engineers in Augusta.

“Most of the money will go to the wastewater plant; whereas, $1 million will be used to repair or replace aging sewer lines in the southern and eastern sides of the city.”

The engineer went on to say, “Plans are to upgrade and expand the wastewater treatment plant. It will be twice as big; there will be twice as much water, and the water will be processed to a higher level of cleanliness.

“We will upgrade various procedures as well as add an extra step to the treatment process.”

Currently, the wastewater treatment plant produces 500,000 gallons of water per day. Once the project is completed, the plant’s capacity will be one million gallons a day.

“This will enable the city and the county to grow,” noted Green. “The city treats sewerage for the county, which has 140 sewer customers in the Blackjack Community and a few more on Old Petersburg Road.”

In conclusion, he said, “This is great news that the city has been awarded these funds, but the best part of it is there is so much grant money. Normally, the USDA limits grants to $3.5 million, but due to the city’s need for expansion, the USDA was able to take advantage of federal reserve funds and award the city the maximum grant possible.”

In his remarks, Mayor Brown said, “I am elated to obtain this money and get the project moving forward. Last week, we were told we might not get the funding, and then Friday, we found out we had received the grant and loan

“At times, we’ve been almost at capacity at the wastewater treatment plant, and there have been a lot of problems,” he continued. “Now, we can update the equipment.”

The city currently has 609 residential sewer users, 147 commercial sewer users, one industrial customer, and one wholesale customer (Lincoln County).

No additional rights-of-way or property will be needed in conjunction with the project.

The next regular meeting of the mayor and council will be held Tuesday, October 7, at 7 p.m. at City Hall.

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