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Morrison may delay sewer plant construction for a year

New rules could mean lower annual loan payments

Published: Saturday, June 28, 2014 1:15 a.m. CST

MORRISON – Thanks to new rules governing the loan process, holding off a year on building the estimated $23 million sewer plant could substantially reduce the city's annual payments.

Still, that could mean the project would cost more in the long term, although how much more won't be known until bids are in – also a process that would be delayed a year, Mayor Everett Pannier said Friday.

A special City Council meeting is scheduled for Monday afternoon, when members will discuss the pros and cons of delaying construction, and likely make a decision whether to do so.

The new plant, to be built on a 30-acre site on the west side of state Route 78, just south of the Morrison Institute of Technology, is needed to meet environmental regulations.

The bulk of the cost will be paid for with a mostly federally funded loan administered by the Illinois Environmental Protection Agency. Residents also are contributing in the form of higher sewer rates.

Plans now call for construction to begin next spring and finish by mid-2016.

But new legislation is changing the rules on the water pollution control loan program, Carl Fischer, the wastewater department manager for project engineers Baxter & Woodman of Crystal Lake, said Friday.

The new rules don't take effect until sometime in 2015, Fischer said, hence the talk of holding off on construction.

Among the major changes the new law will bring: Municipal borrowers, such as the city of Morrison, will be able to spread loan payments over 30 years, rather than the current 20-year term; that would reduce the city's annual payment considerably.

In addition, the new program will include some form of principal forgiveness, the specifics of which still are being worked out; that, too,"would be really advantageous for Morrison," Fischer said.

In fact, depending on how much principal is forgiven, it might be possible to reduce the sewer rate hikes, Pannier said. At the very least, they wouldn't go up any more than now planned, he said.

On the other hand, there will be some money lost if the projects sits on the shelf for a year, Fischer noted. That's because the interest rate on the IEPA loan will rise slightly, and because of the usual inflation in construction costs.

It will be up to the council to decide Monday if making smaller payments over a longer term, which, again, would make more money available to the city each year but could add to the cost of the new plant, is worthwhile.

Delaying the project would result in "what I would call a more reasonable loan payment, and less stress on the city," Pannier said.

The other two items on the agenda up for a possible vote Monday are increasing a line of credit to take out a loan to pay the engineers, money that will be recouped when the delayed IEPA loan comes in, and hiring a new police officer.

To attend

The special Morrison City Council meeting begins at 4 p.m. Monday in the lower level conference room at City Hall, 200 W. Main St. It is expected to last less than an hour.

Go to www.morrisnil.org to view the agenda, or for more information on the sewer plant project.

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