BY RUSSELL HUFFMAN
STEPHENVILLE (September 13, 2016) – The Stephenville City Council is facing big problems that have been compounding themselves for years with its sewer system and now there’s a time crunch if Stephenville wants to be eligible for “disadvantaged funds” from the Texas Water Development Board.
The proposed Eastside Sewer Project represents a $16.5 million expenditure for the city of Stephenville. Mayor Pro-Tem Alan Nix pointed out during a work session Tuesday, the issue has been before the council as early as 2008 and the sewer project was pushed back.
Now the sewer system is about to push back.
A variety of reasons are forcing the project to the forefront to include age, deterioration and the continued growth of Stephenville and they are causing sewer capacity concerns.
Director of Public Works Nick Williams and City Administrator Pat Bridges laid out the problem and began explaining the interworking of the sewer system which has 12- and 15-inch lines going into 10- and 12-inch lines that need replacing with a 21-inch sewer line.
Once the project is done, the city would have a pair of 21-inch lines to provide the relief needed. There is no anticipation the current 30-inch lines running to the water treatment plant would overburdened.
Basically, officials said it boils down to the fact that there are now more toilets than the current system can handle and if something isn’t done and soon – those toilets will stop flushing their contents.
It’s an extensive project that some council members may like to put before the voters, but doing so will take time and could well cost the city of Stephenville up to $4.95 million in disadvantaged funds from the Texas Water Development Board (TWDB).
Mayor Kenny Weldon apologized to the council for the sudden timetable, but said city staff only recently discovered the funding might be possible. Brazos Region team manager Caaren Skrobarczyk helped explain the TWDB’s process during the council’s special meeting prior to the work session.
According to officials at the meeting, there are deadlines and documentation that must be provided by Sept. 22 or Stephenville misses out on a chance at considerable savings on the project.
Making the deadline puts Stephenville in line for “forgiveness” on up to 30-percent of the sewer project $16.5 million cost. The project would be funded through TWBD with a bond and a percentage rate of 0.52 percent.
There are no guarantees Stephenville will get the entire 30 percent “forgiveness” on the debt, but if the city doesn’t get in line soon for funding, it may get far less, or nothing at all.
There is no obligation to actually carry through with the project and Stephenville spending such a hefty sum didn’t set well with Councilman Rhett Harrison, who twice mentioned he felt uncomfortable spending so much money without citizen input.
Then again, no council member seemed to shy away from the idea that up to 30 percent of the project debt could be forgiven because Stephenville is qualified for disadvantaged funds with TWDB. As the council worked its way through the idea of funding, it was clear each member wanted to make sure they had a complete understanding and turned to Financial Director Walter Wood to map out the figures.
Wood reported Stephenville could assume the debt and even with the city’s current debt load of $2-2.2 million over the next three years, with the figure dropping in the fourth year to $1.2 million. Wood and Councilman Doug Svien (who attended via Facetime) both mapped out several ways the debt could be retired.
Wood explained, based on current revenues, Stephenville could retire the sewer project’s debt by 2031 and even earlier by 2027, depending on wants and needs of the city.
Just how good a deal is the TWDB offering?
As a comparison, if Stephenville borrowed $16.5 million at 3.25 percent, the interest over 20 years would cost taxpayers an extra $5.9 million in interest, while a deal through TWBD would cost around $876,000 in interest or a savings of just over $5 million.
Combine that savings with the disadvantaged funding possibilities and Stephenville’s $21.5 million costs on the open market could be reduced to almost half that amount at $11.55 million.
That’s if Stephenville “jumps through hoops,” as Councilwoman Carla Trussell pointed out after questioning the requirements of the TWBD’s process for funding.
In order to qualify for the funding the council had to pass some resolutions to authorize the city to apply for financial assistance from the TWBD and to allow the city to reimburse itself for project expenditures.
Additionally, the council gave its nod of approval for a contract with the Texas Department of Agriculture for a community development block grant program award for waterline improvements for the West Oak Street and East Elm Street neighborhoods.
The council instructed Wood to compile information for the public for possible Town Hall meetings to discuss the upcoming sewer project and allow public input in regard to funding the project.