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Local

Good news for Morrison water and sewer customers

Loan forgiveness, new terms should give people a break from more 'drastic increases'

MORRISON – The city’s residents will get some much-needed relief from escalating water and sewer bills tied to the construction of its new sewer plant.

The city signed off on Environmental Protection Agency loans totaling $15.16 million for the project more than 2 years ago, but had been awaiting word on its request to restructure the life of the loan from 20 years to 30 years and how much of the principal would be forgiven based on several economic indicators.

The city waited much longer for a response because the request was made when the EPA was in the process of instituting new loan guidelines.

The economic factors, such as median household income, unemployment and population trends, are used by the agency to determine a municipality’s ability to repay the loans for costly infrastructure projects. Towns with a population of less than 5,000 are given greater consideration for hardship status assistance.

The EPA has decided to allow the city to refinance the first and second phase loans for the sewer plant, as well as an EPA loan it took out 5 years ago for upgrades to its water plant. Although the life of the loans would be extended 10 years, the total cost of the two sewer plant loans won’t increase.

“The interest rate was dropped from 1.86 percent to 1 percent on both sewer loans, so the interest will still be less with the extra years,” Mayor Everett Pannier said.

The city also learned it will have about $5 million in loan principal wiped away on the two sewer loans, which is about what officials expected.

“We know we’re getting it, but we won’t know exactly how much until we get the final billing on the demolition at the old plant,” Pannier said.

The only work that remains at the old sewer plant in Waterworks Park is hauling in some more dirt and seeding the area.

The developments with the EPA are good news for the city’s water and sewer ratepayers. In anticipation of the new sewer plant, residents have seen huge rate increases. The rate hikes started in 2009, and in October 2014, the council approved a 62 percent combined water and sewer increase.

“We’re hoping to forego any rate increase this year because residents have seen some pretty aggressive increases over 5 or 6 years with the new plant,” City Administrator Barry Dykhuizen said.

The loan restructuring, by giving the city more time to repay less debt, should also relieve ratepayers’ burden in the foreseeable future.

“With the refinancing, we’re close to where we need to be, so we won’t have any more of the drastic increases that had been projected for the sewer plant,” Dykhuizen said.

The council, however, will decide the extent to which the city takes advantage of the new terms. There shouldn’t be much to ponder regarding the sewer plant loans, but there isn’t as much incentive to extend the length of the older water loan.

“We can also refinance the loan we took out for water upgrades, but they didn’t drop the interest rate on that one, so the aldermen will have to decide whether it makes sense to stretch that one out,” Pannier said.

The ordinance should be ready for the next council meeting.

WHAT’S NEXT

The Morrison City Council will finalize the terms of its three EPA loans when it next meets at 7 p.m. Jan. 22 in the Whiteside County boardroom at 400 N. Cherry St. in Morrison.

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