[ back ]
$500,000 grant gets silent treatment
(by Joseph Koziol Jr. - October 27, 2010)
$500,000 grant gets silent treatment
By JOSEPH KOZIOL JR.
Burton Village Council effectively let an application for a $500,000 grant die on the table Monday, because the ultimate cost to the village was more than it could afford.
"It's a good thing to do, but the timing is just not right," Mayor Thomas Blair Sr. said.
Council was silent when a resolution for the grant through the Ohio Public Works Commission State Capital Improvement Program came up on the agenda. The money would have provided some funding for the village's plans to rehabilitate its sewage-treatment plant.
Without a motion to proceed, the village rendered the issue moot, because the deadline for filing the application is Oct. 30.
Mr. Blair said the village likely will seek the grant at a future date. "The timing will be better in the spring or this time next year," he said.
While the grant could have provided the village with $500,000 toward a project that in the past was estimated to be in the $6.5 million range, other requirements by the Environmental Protection Agency would have been obligated to accept a $3.3 million loan toward the plant rehabilitation.
Village Fiscal Officer Christopher Paquette said the zero-percent-interest loan would have required annual debt payments of $168,000.
But he said the EPA would not have approved the loan until the village could show it has water and sewer rates in place to pay it off. "We would have to show we have the rates in place to pay it back, and at this time we don't have those rates in place," he said. Rates would have to be increased to cover the loan obligations, he said.
Mr. Paquette said the loan would carry a maximum of a 20-year obligation. He said he would not want to go longer than that, because the village ends up spending more in interest. He said the village previously received a 40-year loan through the U.S. Department of Agriculture and ended up paying more in interest than the amount of the loan. "I won't recommend that," he said.
Mr. Blair said the village had invited the Ohio Rural Community Assistance Program in to assist the village in looking at realistic rates this past summer. In one scenario, he said, those officials recommended increasing rates as much as 73 percent to make the system self-sufficient.
He said only a nominal increase was approved this past year, but the problem of ignoring the need for rate increases has been going on for the past two decades.
Mr. Blair said the village also is hurting in terms of revenue, because water use is down, possibly because of the use of water-saving devices.
He said the village may need a minimum of three years before it is prepared to begin its rehabilitation of the plant, and construction may not be completed for five to eight years from now.
Mr. Pacquette said he presented various rate increases that are being considered by the village's board of public affairs.
He said he anticipates that the board will begin narrowing down the possible rate increases at its next meeting.
[ back ]
