Ashland residents will decide financing for new sewer plant

2 years 7 months 1 week ago July 11, 2014 Jul 11, 2014 Friday, July 11 2014 Friday, July 11, 2014 10:01:00 PM CDT in News
By: Madi Morris, KOMU 8 Reporter
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ASHLAND - Residents of Ashland will have an important decision to make about a sewer bond issue on the upcoming August 5 ballot.

With the recent population increase in Ashland over the past 20 years, the current wastewater treatment plant no longer meets the Department of Natural Resources rules and regulations.

"The town has more than tripled in size in the last 20 years and although we have a perfectly well-functioning lagoon system, DNR has come in and said you're just too big, you have to build a mechanical plant," said City Administrator Josh Hawkins.

The city's lagoon is currently running on a four-year permit with DNR with which it can levy fines up to $10,000 per day each day against the city because it doesn't meet compliance. So far, the DNR hasn't fined the city because the city has taken steps to expand and improve the system. 

The city has already purchased 10 acres of land just 400 feet from the current lagoon system to build a new mechanical sewer plant, but the question at hand now is where is the money to build the plant going to come from.

The city of Ashland has decided to go to the voters and propose a $7 million sewer bond issue to pay for the new plant. User rates, connection fees and other related charges would be used to pay off the bonds.

"If the voters approve the bond issue we can seek out government financing which is cheaper than private financing and so that would literally save possibly $60,000 to $100,000," said Mayor Gene Rhorer.

If the bond is approved, the city can use a state revolving loan fund or U.S. Department of Agriculture low-interest loan program to pay for the plant. The city has said this would mean a "small" increase in sewer rates for residents and businesses, but it has released no specifics on the amount.

If the bond is voted down, the city will have to go through private funding at a higher cost.

"If they don't pass it, then they have to pay higher interest and this loan could go on and on and on," said Ward 1 Alderman George Campbell.

Either way, the city will still move forward with the project and residents will still have to pay money, it's just a matter of how much money. 

"We're hopeful that any sewer rate increase would be at a minimum and all we will do is simply service on that and maintain an operational facility," said Hawkins. "The sewer bond is about us offering the best level of service that we can to our folks at the lowest cost."

Both Rhorer and Hawkins said the response they have received from the public about the bond has been positive so far. 

There will be a public meeting on Monday, July 21 where the city financial advisor, the city sewer consultant, the board of alderman and Mayor Rhorer will be available to answer any question the public has.

The city looks to have the new sewer plant up and running within the next three or four years.

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