Bond funds will finance sewer work

The city of Portland is one step closer to bonding for state-mandated sewer work.
Members of the Portland City Council voted Monday on first reading to issue bonds for up to $9.5 million to fund storm and sanitary sewer projects mandated by the Indiana Department of Environmental Management.
The projects include the north side separation projects and improvements to the city’s wastewater treatment plant.
The bonding is through the State Revolving Loan Fund, which is a federal fund. The program provides low-interest loans to Indiana communities.
“In Indiana, you have to borrow (the SRF money) in the form of a bond,” Greg Guerrettaz of Financial Solutions Group, said following Monday’s meeting. With the SRF program, the money is paid back to the state, rather than a lending agency.
Guerrettaz said the bond will have a subsidized interest rate of 2.87 percent.
The bond would be paid over a period of 20 years, and the interest rate would be locked in. At Monday’s meeting, he told council members that the interest rate recently increased from 2.5 percent. With the 2.87 percent interest rate, the city will now pay $5,000 more per year, or a total of $150,000 additional, Guerrettaz said. The current rate could increase again after June 30.
“Is it your feeling the longer we wait, the higher the interest rates will go?” asked council member Kent McClung.
Guerrettaz said he is concerned about the interest rate possibly increasing again.
Improvements to the wastewater treatment plant are expected to cost about $1.9 million and the north side sewer separation has been estimated at $5.3 million. Both projects are set to begin this year.
All communities in Indiana are required by IDEM to separate storm and sanitary sewers. The city must complete all of its separation projects by 2028.
In a related matter, council members voted to increase city sewer rates by 30 percent.
After the meeting, Guerrettaz said, “You can’t do the bond without the rate increase.” He said the city wouldn’t have qualified for the bond if the rate had not been changed.
Before council members gave final approval for the rate increase, a public hearing was held. No one in the audience commented. Council members Kent McClung, Don Gillespie, Mike Brewster, Judy Aker and Bill Gibson voted in favor of the rate increase. Todd Nichols again voted against the increase. Kip Robinette did not attend the meeting.
City clerk-treasurer Randy Geesaman said the rate increase will go into effect for the June or July billing cycles.
In other business Monday, council members voted to grant Dayton Progress $15,000 in Portland Economic Development Income Tax funds.
The company recently purchased competitor Lane Punch, which has plants in Canton, Mich., and Salisbury, N.C. Those plants will be closed and some of the equipment will be moved to the Portland facility. To make room for the new equipment, the Portland plant will build a 22-foot by 60-foot addition to the north side of the building. This construction will cost $49,742.60, and the EDIT money will help with the costs.
The new equipment has an appraised value of $140,500. The company expects to hire four new employees to run the machines with salaries totaling $112,320. The rest of the equipment will be moved to Dayton Progress plants in Dayton, Ohio, and Mexico.
The company will have three years to hire the new employees, build the addition and move the new equipment to the Portland plant. If these requirements are not met, the company will have to pay back the $15,000. The money would be paid back over a period of five years at a rate of prime plus one.
The Portland EDIT Advisory Committee met prior to Monday’s council meeting and recommended that the council approve the request.
Council members also voted to send two tax abatement requests for Dayton Progress to the Portland Tax Abatement Advisory Committee.
The company is asking for a five-year abatement for the new equipment and a 10-year abatement for the expansion. Tax abatements phase in taxes on new investments over a period of years.[[In-content Ad]]