$400,000 grant could ease sewer costs
Connection fees could increase to help finance $2 million upgrade of plant
After hearing that the city's sewage treatment plant requires about $2 million worth of upgrades, Tonganoxie City Council members agreed Monday night to seek a grant to help with costs.
In about three weeks, the city will apply for a $400,000 grant from the Kansas Department of Health and Environment.
"That means you don't have to pay it back, and $400,000 is a lot of money," said Pat Cox of BG Consultants, the firm that contracts with the city for engineering work.
City administrator Chris Clark said the city would borrow funds from the KDHE Revolving Loan Fund. He said he hopes to convince KDHE to allow the city to structure the repayment so that the city repays more each year as time progresses.
That would reduce the debt burden on the city in the immediate future at a time when other loans for other projects are being repaid.
To generate additional revenue to help repay the loan, Clark recommends that the council increase the sewer connection fees.
His suggestion is that the council increase the existing $1,000 connection fee by $500. He also recommends another $500 increase after five years, and another $250 increase after another five years. That would potentially generate $1.5 million, at a rate of 75 sewer connections annually.
Without increases in connection fees, sewer rates would have to rise dramatically to repay the loan.
"The rates are going to go up," Clark said. "You don't borrow $2 million and not have the rates go up."
The plant improvements will increase the capacity from processing 400,000 gallons of waste a day to processing 900,000 gallons of waste a day. That should handle growth in the city for the next 20 years. In addition, the improvements will bring the plant into compliance with state and federal standards. If the city does not meet those standards, the state could impose a moratorium on new development.