Council approves USDA sewer grant and loan

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By ELIOT DUC
Record staff

Dunn City Council has taken one step closer to solving its sewage problems.

Council members approved a resolution to accept more than $ 2 million from USDA that the city intends to use for a long overdue sewer rehabilitation project. USDA funding came in two forms, a grant and a low-interest loan totaling $ 2.6 million.

USDA Representative Steve Smith presented a letter of conditions to the board on March 9 detailing the terms of the deal. The USDA has provided a grant of $ 1.2 million and a loan of $ 1.4 million that will go to the city’s sewer rehabilitation project, which was expected to cost $ 2.636 million.

“These are the conditions necessary to come together over the next 24 months,” Smith said. “We have provided the conditions and ask the board to review the resolution to accept these conditions. This means that you intend to fulfill these conditions. If you decide to opt out for whatever reason, you could. In order for us to continue processing and for the engineers to move forward, we need to put the funding in place. “

The terms of the loan were that it was for 40 years with an interest rate of 1.25%. The guarantee for the advance would take the form of a revenue bond for water and sewer, Smith said, and the loan is specifically for the sewer project.

Councilor J. Wesley Sills wanted to know if the $ 2.6 million would be enough to complete all repairs to Dunn’s sewer system.

“If we want to create a bond, shouldn’t we just get more money, because bonds are expensive to take on? Sills asked. “Do we need more money to do what we need to do? I support it, but let’s fix it. Let’s just take the money for what we need to do and fix the problem. It is a serious problem for the city. “

Smith cited the number of estimates prepared by project engineers and said he was confident the attribution would be sufficient. If the bidding process were to turn to the more expensive side of the ledger, Smith said the board could approve the funding corrections.

“If for some reason once the deals come in and go over budget, then the city might try to make adjustments,” Smith said. “We could come back with additional funding if the offers exceed what we initially put in place. We won’t know until the offers arrive. If we come back for extra money, we will know what the costs will be.

At least 80 miles of gravity pipe make up Dunn’s current sewage system, some of which is over 50 years old. A study of the system last year found a majority of 8-inch sewer lines that limited the city’s ability to consider larger lines due to the possibility of massive failures. The study, which recommended upgrading the city’s four lift stations, found that less than 1% of sewer lines are 30 years old or younger and 75% are 50 years old or older.

Estimates from a sewerage capital improvement plan put the cost of replacing or rehabilitating the entire area at over $ 20 million.

Eliot Duke can be reached at [email protected] or 910-230-2038.


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