Fairfield Ledger
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Neighbors Growing Together | Dec 2, 2016

City secures nearly $25 million loan

By NICOLE HESTER-WILLIAMS Ledger staff writer | Oct 18, 2016
Courtesy of: NewBoCo United States Agriculture Secretary Tom Vilsack, fourth from left, poses with Fairfield city administrator Mike Harmon, second from left, Fairfield Mayor Ed Malloy, fourth from right, Fairfield City Clerk Joy Messer, third from right, Fairfield wastewater superintendent Shawn Worley, far right, and others during a townhall meeting in Cedar Rapids. Fairfield officials were invited to the townhall because the city recently received a nearly $25 million loan from the United States Department of Agriculture’s Rural Development program.

“It’s the largest that the [United States Department of Agriculture] has done in the state of Iowa,” said Fairfield Mayor Ed Malloy about a $24.9 million USDA Rural Development loan aimed at rehabilitating the city’s wastewater treatment facility.

“It’s going to allow us to complete all the work on the plant,” Malloy said. “By going that direction, and getting a favorable interest rate, it’s going to allow us to minimize rate increases.”

Although the city only recently applied for this USDARD loan, it has received other USDARD grants and loans during the first step of the wastewater treatment plant project.

“Step-one was the work on the conveyance systems that is going on now,” Malloy said, explaining that the new loan would foot the next phase of the project.

Fairfield’s wastewater treatment facility was originally constructed in 1966, with updates and improvements made in 1984 and 2013. The completed rehabilitation would bring the facility into compliance with the Iowa Department of Natural Resources requirements.

Recently, city officials were invited to a town hall meeting in Cedar Rapids where U.S. Secretary of Agriculture Tom Vilsack, personally thanked Fairfield for recognizing the value of federal dollars to improve water quality issues in southeast Iowa.

Vilsack announced that the enhancements that Fairfield makes to its wastewater treatment facility would help improve the water quality in southeast Iowa.

“The recent flooding in Iowa and other parts of the country has demonstrated just how important high-functioning wastewater systems are to our communities. Sanitary waste disposal systems and safe drinking water are vital not only to public health, but also to the economic vitality of rural America,” Vilsack said. “Building and maintaining water infrastructure creates jobs, boots economy, provides rural families with safe and reliable water, and this particular investment will help to minimize the impact of future flooding on homes and businesses in southeast Iowa.”

“[Vilsack] said that, ‘the USDA is happy to provide these funds for small communities to address the challenges of clean water throughout the state,” Malloy said, adding that the USDA isn’t an agency that deals with larger cities, but that Vilsack encouraged Cedar Rapids to be a convener for smaller surrounding towns to utilize the resources available through the USDA to deal with some of their water quality issues.

USDA Rural Development funds are available to communities at or below 10,000.

According to the release, since 2009, USDARD has invested nearly $13 billion to start or expand 112,000 rural businesses; helped 1.2 million rural residents buy homes; funded nearly 9,200 community facilities, such as schools, public safety and health care facilities; it has also helped bring high-speed internet to 6 million rural residents and businesses.

This loan is intended to allow city leaders to implement a master plan during the next 10 years to make improvements to the treatment plant, repair much of the collection systems and address high flows during rains. Treatment plant upgrades include items, such as new trash screens, new grit removal systems and pumps, as well as an enlarged flow equalization basin.

“There are other communities across the state that are doing what we are doing — replacing old treatment plants and infrastructure,” Malloy said. “Whether they are using USDA dollars or other state sponsored dollars, a lot of borrowing is going on. [The USDA] caught us doing the biggest piece of our project, and those dollars were available at a very favorable rate. We were fortunate to be able to partner with the USDA.”

Malloy said the city secured a 40-year loan, which provided more time to pay it off at a lower interest rate.

“Prior to securing this loan, we were looking at about a 40 percent increase in rates — this will only bring our rate increases to about 8 to 10 percent,” Malloy said. “It’s a big costly project, and I think our decision making process on the length of the loan we wanted to do is what was the best rate for the rate payers of Fairfield — this was our best option.”

“We’re very excited about our partnership with USDA,” city administrator Mike Harmon agreed. “The favorable terms of the loan will lessen the impact of required rate increases. We are looking at approaching council about bids in late November and hoping to open bids in January, with construction starting around March.”

Harmon said as of today, the project’s completion time would be around October of 2019.

“This will upgrade our capacity, allowing us to treat 9 million gallons per day with a storage capacity for approximately 30 million gallons,” Harmon said. “That’s different from today where we are only able to treat 3 million gallons and store 10 million gallons — this will triple the capacity of the waste water treatment facility.”

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