City manager flags high wastewater construction costs, seeks federal help; warns of higher construction loan rates

City Manager Gigi Dennis told the March 17 council that the wastewater treatment plant is expensive and that bid openings made staff "numb" to the price tag. She said staff requested federal assistance and spoke with congressional and U.S. Senate staff; she reported asking a congressman's office for $10,000,000 in direct funding but said staff might scale back to a $5,000,000 request depending on political considerations.

Dennis said the city has taken steps to secure construction financing but expects higher interest rates for construction loans (she cited roughly 6%) and noted rural-development loan funds typically do not disburse until a plant is operational, creating a financing gap during construction. She said staff will meet with bond counsel and rural development over the coming weeks to clarify options and timing.

Why it matters: the plant appears to be a large capital project for a small city, with potential rate and budget implications for local customers if the city must increase rates or borrow at higher interest costs.

Next steps: staff will report back to council after meetings with bond counsel and USDA/rural development and will refine rate and financing recommendations.