Town Administrator Katie Sickles' report to the town board at its Aug. 8 work session began inauspiciously:
"It's been a hard day today," she said.
Then she continued, "We just saw $377,000 float out the window."
The $377,000 was the amount of forgiveness that would have been granted if the town had qualified for a $2 million, zero-percent interest loan to build a new sewer treatment plant.
According to town staff accounts of the matter, that was the result of a conference call that took place on Aug. 8 and which involved local, state, and federal officials involved in the town's funding plan for the plant. The highest amount of forgiveness that had ever been granted for these loans was $250,000, said Public Works Director Dave Smith. Cedaredge officials had been surprised and pleased by the offer of a $377,000 discount.
The town also has had its eye on an outright grant from the state's Department of Local Affairs for another $1 million to help complete its financing package.
During the conference call on Aug. 8, according to town staff, a couple of big problems with the town's proposed financing package were discussed. The first one was that Cedaredge lacks necessary matching funds to qualify for all the grants it needs. State and federal officials on the funding end wanted to see a "complete funding proposal" from the town before acting on the hoped-for loan/grant package.
Second was the fact that a month ago the town began evaluating the possibility of upgrading its current lagoon system instead of building an entirely new mechanical treatment plant. State and federal officials don't want to commit to funding a new Cedaredge sewer plant if there is a better alternative available. Trustees aren't scheduled to hear preliminary reports on the lagoon upgrade idea until Thursday, Aug. 15, at their regular meeting.
The Aug. 8 conference call marked a deadline moment for the state and federal officials, town staff indicated and, as Sickles remarked, that is when the $377,000 went "floating out the window."
"It was really incredibly bad timing," Sickles said. The town was angling for the big financing package based on a proposal for an entirely new treatment plant, not for the lagoon upgrade that's also being looked at.
Sickles noted that Cedaredge had been "on the top of the list" for receiving the big loan and $377,000 forgiveness. There is a possibility that the town may be able to apply for the funding at a later date, but there will be no guarantee of being top rated again, or of being offered the bigger-than-normal forgiveness amount.
In explaining the complex turn of events that led to the lost opportunity, Sickles and Public Works Director Smith indicated that the funding deal might have moved forward anyway if trustees hadn't opted to look at the lagoon retrofit option, or if the state and federal funders hadn't known of it. But play-by-the-rules honesty required that the lagoon study be disclosed. And by deciding to move forward with the lagoon study the town "has been penalized for trying to save some money," remarked Mayor Pat Means.
The town has been involved for over two years in planning, site evaluation, site selection, preliminary design, funding searches, and a residential sewer rate increase. Those efforts aren't as yet considered wasted, but town officials believed they had to proceed with them because of the uncertainties created by the state's withholding of an operating permit for almost three years, and by EPA regulations on effluent the lagoons can't meet.
The town's two years of on-the-run work trying to pull together the project's planning elements, political elements, local financial elements, and multi-agency funding elements was a balancing act that came crashing down at the Aug. 8 conference call.
In addition, there has not been a clear cost estimate for a new treatment plant stated in public. Original estimate was $3.66 million for a mechanical plant, but that estimate did not include land acquisition and other costs. A presentation on the new plant design given to the community last spring promised a containment building and sophisticated odor controls, but it failed to mention the big costs they would add.
Only in the last two months have trustees come to realize that Cedaredge can't afford the new mechanical sewer treatment plant envisaged, and for the first time they have stated so at their public meetings.
At the trustees' Aug. 8 work session the mayor and trustees mentioned costs of $5 million for the new design, a figure almost 30 percent higher than the original cost estimates and a figure never heard before in public from officials.blog comments powered by Disqus