Gardner council members took necessary steps to create a benefit district and obtain bond debt to build a road and sewer upgrades related to the USD 231’s soon-to-be constructed school buildings.
The city will fund 50 percent of street, sewer and water infrastructure to serve the new school campus. The total estimated cost of the project is $5.1 million.
Laura Gourley, city finance director, said the debt related to the project will be in the form of taxes and utility rate increases.
In addition to the benefit district, city officials approved a $1.3 million project to expand sewer capacity in order to serve the new school campus. That project will be fully funded by the city.
“Funding for this will probably be a sewer rate increase,” Gourley said. “I don’t see any way around that.”
She estimated an increase of approximately $2.10 per month for the average user. That increase would be on top of planned annual sewer rate increases of 5 percent.
City officials planned to initiate a sewer expansion a few years down the road, but the school project accelerated the need.
“The larger piece of the sewer, that was supposed to come online in 2016,” Dave Greene, public works director told the council. By that year, the planned rate increases were expected to help fund the project limiting the long term need for annual rate increases related to that piece of the school project.
“All we’ve done is accelerate the debt service for two years,” Greene said.
To help limit potential increases in the future, Gourley said the city plans to refinance a 20-year loan related to the Kill Creek Water Treatment Plant. Under the terms of the refinance, the city will pay off the remainder of the loan – approximately $13 million remains from a $20 million original balance – in the same time frame. However, Gourley anticipates the refinancing will save the city about $900,000 over the next several years.
The annual loan payments will be significantly less, she told the council. “This is a positive savings every year,” she said.
A 1 percent sewer rate increase produces about $30,000 of revenue for the city, she explained.
“And we’re talking about savings of $90,000 every year,” she said. “There’s no loss here.”
In other business, the council approved a contract with Pepsi Beverage Company to provide drinks and supplies to the Gardner Parks and Recreation Department.
Council moves forward with infrastructure for new schools