Solvang moves forward with USDA loan application for wastewater plant upgrade estimated at $18.5 million

City staff held the required public meeting to notify the community of an intent to apply to the U.S. Department of Agriculture (USDA) Rural Utilities Service for financing to upgrade Solvangs wastewater treatment plant.

Staff explained the upgrade is sized to maintain compliance with waste-discharge requirements and offered updated cost estimates: the project is currently estimated at about $18.5 million; a $1 million congressional appropriation (from Rep. Carbajal's office) would reduce the anticipated loan need to about $17.5 million. Staff said illustrative loan terms discussed with lenders were for a long-term loan (roughly 3840 years in the presentation), with an example rate of about 4.75% and an estimated annual debt-service figure just under $983,000.

The presentation emphasized this meeting was a procedural step required by USDA rules (notice of intent and a public meeting) and was not a council vote to accept a loan. Staff said they will complete federal environmental (NEPA) work needed for the application and that final loan terms would be set by USDA at the time of any approval.

During public comment residents asked specifically how the borrowing would affect household bills. One resident asked, "how much an average resident's bill will be going up," noting Solvangs comparatively high water bills and requesting that staff quantify the per-household impact in the next report. Staff and the city manager said the sewer-rate increases and earlier rate studies already factored anticipated debt service into planned adjustments (a 15% sewer increase was noted for July 1) and that staff will convene a resident rate committee to review rates and projected increases.

Council recorded direction that staff may pursue the USDA application package while continuing to explore other financing options; any loan agreement would return for formal council approval.