City of Cassville gets $1.6 million grant

Wednesday, August 15, 2018

USDA money to help fund upcoming water project

History was made this week when the Cassville City Council voted to accept a $1,684,000 grant from the USDA, believed to be the largest grant the city has ever received.

Steve Walensky, Cassville city administrator, said the city applied for a $5,620,000 rural development loan to fund its upcoming water system project, using funds borrowed from the $11 million bond issue passed in April, and when the USDA offered funding, Walensky was shocked.

“We thought all of this would be a loan, so to get a grant like that is very exciting,” he said. “I’ve asked around quite a bit, and no one has ever heard of the city getting something like this before. I’ve been tickled in the past just to get grants of $20,000 and $40,000 from the state, so this is really something.”

The USDA awarded the city $1,684,000 in grant money and $3,936,000 in a loan. The grant money, Walensky said, opens up an opportunity for the city to retain some of its bond capacity for future use if needed.

“There’s two great points for this,” he said. “One, We have the customers in mind, and with the grant, we won’t have to raise rates as fast because that’s almost $1.7 million of bond money that customers do not have to pay back. And two, we’ll get done what we promised, and have freed up funding if we have to do more projects down the road.”

Walensky said the loan is on a 35-year note, and the interest rate will be somewhere around 2 percent.

The $11 million bond issue narrowly passed in April, getting 59 percent approval by voters when it required 57 percent. The water project funding will go toward is the replacement of more than 21 miles of water pipes and install more loops in the system to prevent dead end pipes.

In conjunction with the water project is a sewer project, for which the city has obtained a $4 million loan. That project includes work like open cut and trenchless repairs, cleaning and CCTV use, and inflow and infiltration abatement.

Walensky said both projects involve a lot of in-ground work, and he has been coordinating water and sewer needs with street replacements scheduled using the transportation tax. An example, he said, is how the city fixed three manholes on first street before repaving it.

More information about how the loans will affect water and sewer rates will be released when it is available. In the loan and grant award letter ent to the city, the USDA said the city has proposed an average rate of $8.44 minimum for the first 1,000 gallons used, then $6.67 for every subsequent 1,000 gallons. Walensky said this figure is a USDA average of total use, which encompasses residential and commercial base rates, as well as usage rates.

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