By Krystal Smalley
ksmalley@wbcowqel.com
The city of Bucyrus is officially one step closer to a new water treatment plant.
The Bucyrus City Council met in a special meeting Wednesday evening to pass a resolution that would authorize the Service/Safety Director to advertise and enter into a contract for the new water treatment plant and distribution project. That project, which included demolishing the existing water plant and lagoons, is not to exceed $29 million.
“This has been in the works for many years,” explained Mayor Jeff Reser.
The project had actually been postponed during tough economic times for the city but it was taken up again and approved in 2014.
“We’re ready to go on it,” Reser said. “They’re replacing the existing plant that was built in the 1940s. It’s in serious disrepair and has nearly flooded several times in the last 10 years.”
Due to the project’s postponement, the city did have some engineering costs but the wait proved to be fortuitous for the city.
“The good news is the city, in having the project delayed, is now able to get a better interest rate,” Reser said. “So actually we’ll have greater savings to the city by delaying it those few years. And if we can get those interest rates locked in when we put this out to bid, we will get not only a better interest rate but we will be able to borrow all of the money from WSRLA.”
The city had originally planned on funding the water treatment plant with two loans, the WSRLA (Water Supply Revolving Loan Account) and an Ohio Water Development Authority loan. Recently, the cap on the WSRLA loan amount was increased to $40 million, which allowed the city to fund the water plant under one loan. The OWDA loan had an interest rate of four prevent while the WSRLA loan has an interest rate between 1.39 and 2 percent.
Reser said locking in the WSRLA loan at a low interest rate would save the city a substantial amount of money.
“The interest rate will not be determined until we’ve gone to bid, the bids come in, and we decide to award the bid. That’s the time at which they set the interest rate,” Council President Sis Love said. “That’s why we can’t say for sure what’s it’s going to be.”
Currently, the interest rate is sitting at 1.39 percent, which has pushed the city to be proactive in snagging a loan at that rate.
“Timing is critical here,” Reser said. He added that if the loan would go up to 2 percent the city would lose $100,000 a year and over the course of the 20-year loan it would amount to $2 million.
“That is why we are here,” Law Director Rob Ratliff said. “We passed an emergency piece of legislation to allow it to go to bid immediately. The bid process takes 45-60 days. The Fed has announced a proposal for interest rate hikes for the month of June, so if we can finish this quickly we can get it in before then. If we wait until after the month of June a one or two percent hike could result in millions of dollars for the city.”
The state-of-the-art facility, which Reser described as having no frills but would be highly automated, would be built on city-owned property on Beechgrove Rd. The new lime lagoons would be located on that property.
The current lime lagoons and their eventual fate was a sticking point for Councilman Bruce Truka. He wanted to see the resolution state that the lagoons were to be removed completely and the original topography restored. The original resolution stated that the lime sludge lagoons would be cleaned and abandoned.
After some debate, it was agreed to amend the resolution to read as “cleaning and removing the existing lime sludge lagoon.” Reser confirmed with the engineer that the money in the budget was designed to clean the lagoons and restore the original topography.
The council approved and passed the final amended resolution.