City council weighs water and sewer rate increase, bonds | News

City leaders are continuing ongoing talks about water and sewer rates and looking at ways to fund major upgrades for the city water treatment plant.

Talks began two weeks ago with Kenny Green, president of G. Ben Turnipseed Engineering Inc.

Since then, city council has approved and Mayor Parham-Copelan has signed a contract with the engineering firm for them to begin planning stages at the water treatment plant.

“As I shared with you two weeks ago, based on the numbers that Kenny [Green] has put together, it appears that our best option is going to be the bond option, but we don’t know that for sure, yet,” City Manager Hank Griffeth said Tuesday evening.

He explained that one funding option involves federal loan money, which can complicate matters.

Griffeth said he and Rob Hadden, the city’s water and sewer superintendent, had talked about it and agreed that going the federal route likely adds 20 to 25 percent additional cost to a project.

He said the bond option would alleviate some issues the city would have to contend with although they would still follow the city’s procurement requirements, which are very similar to federal requirements.

“They just don’t require quite as much reporting,” Griffeth said.

The city manager said he recently attended a meeting in Atlanta and understands that Gov. Brian Kemp is anticipating putting somewhere between $50 and $75 million in additional monies into GIFA infrastructure financing of state funds.

Griffeth said a GIFA official explained to him that such funds would be state money and therefore would not have some of the federal requirements attached to it.

“That’s simply what I know about it at this point in time,” he said.

Griffeth also informed the mayor and city council members that there were some state GIFA funds available without additional administrative costs associated.

“We would be eligible for some debt forgiveness on GIFA, but not sure how much,” Griffeth said. “If I had to guess, I would say if we borrowed anywhere from $20 to $30 million, we’d probably be looking at somewhere between $2 and $4 million possibly being forgiven.”

The city manager said he would have an official with GIFA come and talk with them to discuss the process and options.

During a noon city council work session Friday, a guest speaker was expected to talk to city leaders concerning the lay of the land on public facilities authorities.

Griffeth shared a draft of proposed legislation on public facilities authorities.

“We’re going to work to give you all the information you need to make a decision but we know the decision that can’t be made is not to raise water and sewer rates because that’s what we’ve got to do in order to be able to service this bond or service the GIFA loan and get things done that we need to do,” Griffeth said.

The city manager said a couple of city council members had talked to him about the $1 million capital improvement and the rate analysis that Green did for the city.

 “As we all know, and as we have found out in bidding projects the last two years, $1 million [doesn’t] go nearly as far as it used to, so while I would love to have a lot more in that capital improvements piece, I think for the length of time that we would be looking at collecting, that we could generate some fairly decent capital improvement money,” Griffeth said. “I would just tell you that would not be all the money we would have to look at from a capital improvement standpoint.”

He said the city had been paid for two phases of the water and sewer system transfer with Baldwin County as part of the agreement between the local governments during Service Delivery Strategy (SDS) talks.

“We have completed the transfer on Phase III and are working to get invoiced for that now,” Griffeth said.

He told City Alderwoman Jeanette Walden that when the county is invoiced, they pay pretty quickly.

Phase IV will not be completed for some time later.

“Y’all can’t imagine the mess that there is with pipes in the ground along Log Cabin Road, North Jefferson Street and Sinclair Dam Road,” Griffeth said.

A lot of work has to be done before phase IV is completed, he said.

The city manager said the city may be able to conduct between $3 and 5 million in capital improvements initially.

“That really doesn’t need to be jumped into until the work on the water model is being done now is completed because that will give us an indication of where best to spend that money,” Griffeth said. “We do have two projects that have been engineered already. We have bid both of them and got no bidders…