Archive for Thursday, November 5, 2009

Congress earmarks $500,000 for water plant

Congress approved a bill with $500,000 to the city of De Soto last week for improvements to the Sunflower water plant.

Congress approved a bill with $500,000 to the city of De Soto last week for improvements to the Sunflower water plant.

November 5, 2009

A bill including $500,000 for upgrades to the water plant at the Sunflower Army Ammunition Plant has passed Congress and is awaiting President Barack Obama’s signature.

The money was an earmark in an 2010 appropriations the bill for the U.S. departments of Interior and Environment. De Soto City Administrator Pat Guilfoyle said he was informed by an official for Sen. Pat Roberts’ office that the president was expected to sign the legislation later this month.

The money is to be made available directly to the city of De Soto rather than passed through a state agency as were the stimulus grants of earlier this year, Guilfoyle said.

The city has hired Larkin Group to complete engineering and design for three improvements to the water plant needed to make it more dependable.

Those upgrades, estimated to cost $1.7 million, would include a new water line from the plant to the city’s water distribution lines, new electrical power lines to the plant and a backup generator.

Last month, the De Soto City Council authorized spending up to $2 million for the improvements. That figure was meant to give the city some flexibility should the projects be more expensive than estimated.

“Whether the improvements cost $1.5 million or $2 million, that will be $500,000 of relief to (water) rate payers as we pay off the bonds,” Guilfoyle said.

The city administrator said he assumed the $500,000 would be a reimbursement to the city for upgrades rather than an upfront award.

Tax-free municipal bonds have been the traditional financing tool for large municipal projects, but Congress has created several new bond financing tools in the past year in response to the recession that the city could use to pay for the improvements, Guilfoyle. Those tools do not allow investors a tax-free shelter and thus interest rates to the city would higher, he said. That would be offset by the federal government’s commitment to pay for up to 45 percent of the interest cost.

Although numbers would have to be worked up, it appears the new tools would offer the city — and city water rate payers — a better deal, Guilfoyle said.

As that design work gets underway, the city is negotiating with Sunflower Redevelopment L.L.C. for easements through Sunflower for electrical and water lines, a long-term lease for the four iconic Sunflower towers and additional water rights from the old Sunflower well field west of De Soto.

Guilfoyle said the negotiations were close to producing a settlement.

Also to be released this week is the final draft of a feasibility study of the formation of a wholesale water cooperative supplied by the Sunflower water plant. Discussion of the study is on Thursday’s De Soto City Council agenda.

Should such a entity be created, partners would share in the cost of paying for upgrades at the Sunflower water plant.

Joining with De Soto in paying for half the $50,000 feasibility study (a Kansas Department of Health and Environment paid for the other half) were the city of Gardner and Johnson County Rural Water Districts Nos. 6 and 7.

In addition to those possible partners at the Sunflower plant, city engineer Mike Brungardt has made pitches in the last month to Douglas County Rural Water District No. 4 and Baldwin City.


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