Editor’s Note: On Nov. 7, voters in the city of Trenton will be deciding whether or not to approve up to $8 million in bonds to finance improvements to the city’s wastewater treatment system. Information answering the following questions has been provided by TMU staff.
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Why is this proposal on the ballot?
The wastewater treatment facility needs approximately $8 million in upgrades to meet new permit requirements that go into effect on Dec. 31, 2008.
Improvements are also needed to more effectively comply with current permit limits; increase treatment capacity for excess storm water flow; increase storage capacity for finished treatment waste product (sludge or biosolids); and to correct long-term treatment and maintenance issues associated with a plant that began operating in 1981.
Trenton is not alone; many communities in the state are faced with upgrading their wastewater treatment plants to meet new Environmental Protection Agency and Missouri Department of Natural Resources guidelines.
How much will it cost?
Current projections are a total cost of $8 million in improvements. TMU staff has been working with ConAgra officials, the city’s largest wastewater producer, on ways to reduce the amount and strength of the Trenton plant’s discharge into the system. ConAgra and TMU are looking at two different plans that could reduce the amount of wastewater ConAgra discharges which, in turn, could lower the scope and cost of the overall project from what is planned now. If the bond issue passes, that would set the limit of what could be financed through the SRF program. But TMU is not required to spend the full amount. The amount borrowed may go down if the project can be scaled back or cost reductions are realized in the final design phase.
How will the improvements be financed?
If approved by voters, bonds would be purchased from the Missouri State Revolving Fund program. The primary benefit of the SRF program is their 70 percent reduction on the interest rate charged, which means that the overall loan repayment costs will be lower. The interest rate charged by SRF is likely to be less than 2.5 percent. The bond election requires a simple majority for passage.
The bonds would be paid back through an increase in sewer rates.
The exact amount of the increase is dependent upon the total cost of the project, which will be finalized closer to construction starting. The rates are likely to be increased over several years as the work is completed. Preliminary calculations show an average residential customer would see their current monthly rate of $14.09 increase to approximately $24. It is anticipated that all rates will be increased by approximately the same percentage. If the overall cost of the project is reduced, the increase would be less.
Currently, average residential charges for the same use for area communities include Chillicothe, $21.04; Marshall, $21.35; Macon, $22.51; and Moberly, $22.80.
What is the alternative?
The board is committed to making the needed improvements even if a more expensive method of financing, such as lease/purchase, is needed. The most cost-effective way of financing the project is through the SRF with a bond election approved by Trenton voters. TMU has utilized the SRF program in the past and the city and TMU have both used lease/purchase agreements in the past so they are experienced with how each one works.
If a funding source other than SRF is used, it will make the overall project cost more expensive and require higher sewer rates to pay for the additional costs. TMU does not operate on any tax revenue but instead relies on the money paid for the services provided.
What if I have more questions?
Contact Chad Davis, Utility Director, Trenton Municipal Utilities at 359-2281 or go to the office at 1100 Main St.