The Gardner City Council authorized a revolving loan agreement with the state of Kansas to help finance its portion of a partnership with the city of Edgerton to construct a sewer treatment plant.
The $6.945 million will cost the city about $460,000 per year at an estimated interest rate of less than 2.4 percent.
Dave Greene, public works director, said the city would otherwise have to issue higher interest general obligation bonds to finance the project.
“This (revolving loan) is a low cost financing alternative,” he said.
Gardner earlier this year approved an agreement to partner with Edgerton in the construction of the new sewer treatment plant.
The plant will be owned by Edgerton and provide wholesale service to Gardner.
Edgerton had been planning to build a half-size treatment plant to serve the intermodal logistics park and to add capacity for future growth.
Gardner then agreed to pay for additional capacity at the plant to delay having to expand its Kill Creek Wastewater Treatment Plant.
The intermodal logistics park is expected to open in late 2013.
According to the agreement, Edgerton will construct a pipeline and a lift station to serve the intermodal logistics park and the city.
Gardner will construct a lift station near 191st Street and Waverly Road, as well as a gravity sewer to provide immediate flow, and a force main.
Edgerton will retain ownership and operation of the plant and its pipeline, although Gardner will participate as a 50 percent partner in funding the construction and land acquisition for the new plant.
Either city may propose a future expansion to the plant.
Before Gardner agreed to participate in the project, Edgerton was looking to finance the $11.9 project on its own.
The agreement with Gardner doubles the size of the plant from 250,000 gallons per day to 500,000 gallons per day and saves Edgerton about $2.4 million.
Gardner’s final cost will depend upon unknown subsurface conditions and depth of sewer construction.
Gardner will be required to generate 90,000 gallons of sewage per day to maintain its part of the agreement.
That amount is expected to eventually reach 150,000 gallons per day.
Within 60 days of the plant being substantially complete, Edgerton and Gardner each will be required to contribute $50,000 to a major maintenance fund for future repair needs.
The Edgerton City Council in 2009 approved a public infrastructure finance agreement with BNSF and the Allen Group that specifies financing See GARDNER, page 8
From GARDNER, page 1
for $46 million to $53 million in road and utility infrastructure to support the development.
Various revenue sources from the development are to be placed into a public infrastructure plan that is expected to fund projects in six stages and pay off debt obligations over time.
Those revenue sources include property, excise, utility franchise and utility sales taxes and origination fees generated by the intermodal logistics park.