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City seeks loan for wastewater plant design work

The Sunnyside City Council this past Monday night authorized Public Works Director Jim Bridges to move forward with a Public Works Trust Fund (PWTF) loan application to help pay for design costs for upgrades to the wastewater treatment plant.

Bridges explained the reason for needing to pursue the PWTF loan to the Council on Monday night.

To date, said Bridges, the city has secured $18.4 million from a variety of funding sources to help with the design and reconstruction of the community's wastewater treatment plant. However, not all of the funds secured can be used for design services, he said.

In May of last year, the city, said Bridges, received a $964,300 grant from the Environmental Protection Agency (EPA), which was supposed to be administered by the state department of ecology. The grant from EPA, said Bridges, was to be used along with a $750,000 PWTF loan the city had obtained in January 2004 to begin designing the new wastewater treatment plant.

Along the way, the city began receiving invoices for design services from the firm it contracted with, CH2M Hill. In November of last year, Bridges found out that DOE wasn't administering the grant and that the EPA was overseeing the process itself. Then in January, Bridges received notice from EPA that it was not allocating grant money for the design portion of the wastewater treatment plant improvements. EPA further clarified, said Bridges, that it would only fund task orders for the construction portion of the project.

In August of this year, EPA agreed to allow the city and CH2M Hill to amend the contract for services, which paid for some of the design work. Bridges said that despite EPA switching directions, the city was still left with a $322,675 shortfall for design costs.

The Washington State Public Works Board notified Bridges that the city is eligible to borrow the remaining money to cover the shortfall for the design phase. Bridges had some additional good news for Council, as this loan and the original loan through the PWTF could be combined. The combination of the loans would allow the city to lower the amount of money it has to pay back over 20 years. The city was scheduled to make five annual payments of $212,400 under the terms of the original loan. Over a 20-year period, the city will just have to make annual payments of $54,750. Interest payments over the 20-year term for the loan will total $51,125, compared to $13,688 for the original five-year loan.

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