Thursday, 06 August 2020 19:27

Ellerbe leaders weighing funding options for sewer projects

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Logan Parsons of LKC Engineering gives an overview of funding options for Ellerbe's sewer projects during a town meeting Aug. 3. Logan Parsons of LKC Engineering gives an overview of funding options for Ellerbe's sewer projects during a town meeting Aug. 3. William R. Toler - Richmond Observer

ELLERBE — Town leaders have two financial decisions to make within the next month related to its sewer system.

Logan Parsons of LKC Engineering told town board members Monday that they have to let the USDA know before the end of August if they’re still interested in a grant to help purchase a truck to clean out the sewer system.

The truck, he said, costs more than $300,000.

While the company does offer financing, he said it’s not really a great deal for the town. The USDA grant would only cover a maximum 55% — maybe less — leaving the town responsible for rest.

The application process began in March, but they are still waiting on the 2019 audit, Parsons said.

Mayor Fred Cloninger said if the town was to spend that kind of money, it might be better off to use it for small-scale repairs and contract out the cleaning to keep from taking on more debt.

Town Commissioner Joe Grooms suggested getting quotes from contractors and comparing that to the cost of a truck before making a decision, which is what the board decided to do and a special meeting will be called later in the month.

Earlier in the meeting, Parsons gave an overview of the Wastewater System Rehabilitation project, for which the town was recently awarded a grant and loan from the state.

According to Gov. Roy Cooper’s office, the town will “receive $2,097,000 in combined funding through a Wastewater State Reserve grant and loan and a Clean Water State Revolving fund loan, with principal forgiveness, for rehabilitation of its sewer system.”

An Asset Inventory Assessment several years back found $6 million in repairs to the town’s system.

“There’s a lot of repairs that have been needed for a while,” Parsons said.

Some of the worst areas are on Walker and Pine streets, which have cracked clay pipes. One spot on Pine Street where “the whole bottom of the pipe is busted out,” he said.

The cracked pipes allow water to seep into the system and the more water that gets in, he said, the more money the town has to pay to the city of Rockingham for treatment.

“You want to fix these problems as soon as you can and try to keep your system as tight as possible …,” Parsons said.

He called the state’s  award a “very generous offer.” 

The town is eligible for up to $549,539 of a state reserve project grant and $1,547,461 through the Clean Water State Revolving Fund loan program. With the loan, the state will forgive up to $500,000 with the remainder being payable at 0% interest.

The town would have to contribute $40,000 and pay the loan and grant fees.

The 0% interest loan is one of the greatest benefits of the program, Parsons said. The downside, he added, is that the town would have to pay $52,000 per year for 20 years.

Grooms asked if the rest of the infrastructure would hold out for those 20 years or if there were other issues the town would have to address before the loan is paid.

“Fifty-two thousand a year is a lot of money for Ellerbe in the sewer department,” he said.

“This is certainly not all you need to fix,” Parsons said, referring to the current project. “I would say these are the highest-priority items … a lot of your old system … is in about the same condition.”

Grooms said he was concerned about having to take on another high-dollar loan a few years after the town starts paying for the current project.

“I know you’ve gotta do what you’ve gotta do, but …,” Grooms said.

Parsons said the more the town could do now, the better.

“You can certainly fix things as they come up,” he said, giving examples of small spot repairs.

Parsons added that it would be more efficient for the town to have a contractor do as much as possible in one project.

He said it would be a good idea for the town to continue to look for other funding opportunities, especially grants. However, Parsons added, grant dollars have been harder to come by over the past decade.

The town is expected to vote on whether or not to accept the state’s offer at its September meeting.