Duncan City Council agreed to enter into a loan for more than $20 million with the Oklahoma Water Resources Board through its Clean Water SRF program during the regularly scheduled council meeting Tuesday in an effort to help replace and rebuild aging infrastructure.
City Manager Kim Meek said the amount of $20,446,000 stems from a four year study the city has been involved in for the last year.
“You’ll recall that we entered into a contract with Tetra Tech for an inflow and infiltration study — that’s a four year study,” Meek said. “We already received our first year of recommendations of things that needed to be fixed along with a cost estimate from the engineers. This loan would be to begin those repairs on the sanitary sewer system, man holes, line replacement.”
Meek said this will also help with the Waste Water Treatment Plant.
“We’re doing this in conjunction with the consent order that we’re under at the Waste Water Treatment Plant,” she said. “Too much storm water is getting into our sewer system and going to the Waste Water Treatment Plant during high water events we have overflows and plus we don’t want to treat water that we don’t need to be. These go hand-in-hand, it is kind of a three-part-step.”
Allan Brooks from Public Finance Law Group in Oklahoma City said the loan will act as a line of credit and interest will only be paid on what is drawn down.
“Kim gave a good over view of why we’re doing this. We’re looking at a line of credit, it’s a loan, but it’s a line of credit. You only pay interest on what’s drawn down. The rate of interest will be set a few days prior to closing. It’s currently contemplated — our hope is to close this transaction in early- to mid-December,” Brooks said. “If we set the rate today, it would be about 2.05 percent fixed for 30 years. Rates are very, very attractive, which is part of the reason why we’re trying to move this along and lock in the rate on the line of credit.”
Brooks said the transaction would be secure from the Duncan utility system revenues, along with other debt that’s outstanding. He said the resolution Duncan council looked at authorized an interest rate including administrative fees not to exceed 3.5 percent.
“Again, we would contemplate that rate we set today would be about 2.05 percent. Hopefully sometime early in December rates will be in that same range,” Brooks said.
Before the resolution of the loan went to vote, Vice Mayor Patty Wininger said this was something the city had to start working toward.
“What we know is we’ve got aging systems in our community. You know, they’re 60, 75, 80 years old with our sewer lines and it’s affecting our Waste Water Treatment Plant,” Wininger said. “These are repairs that have to be made, we can’t continue to operate like this with aging infrastructure so it’s a good way to plan proactively for how we’re going to use the money to have engineers and repair people and maintenance and all to fix these lines — not for the entire city at one time, but at least the most heavily damaged portions.
“We know the Oklahoma Water Resources Board has been very favorable to us, communities like ours to do these projects. Certainly can loan us the money and work towards improving the infrastructure of our community for our citizens now and in the future.”
Mayor Ritchie Dennington chimed in and said, “As he (Brooks) stated, the chance of interest rates getting any lower is pretty slim, so you take advantage of what you’ve got.”
Brooks agreed and said these loans work for communities, big or small.
“Our largest cities in the state who have stand alone credit ratings that are very solid have used this program to the greatest extent the water board will allow them to, so it’s a very popular program for both large and small communities and everyone gets treated the same way in terms of interest rate” Brooks said.
The loan resolution passed unanimously.
In other news, council approved:
• An invoice from RCJ Construction, Inc. for work completed to date on three new restroom and shower facilities for the Lakes Department for $70,000. A full update on this will follow in the Weekend edition of The Duncan Banner. This edition will also include public comment from Daniel Keith about stump removal near Turkey Terrace.
• Duncan Municipal Cemetery Columbarium rules and regulations and Niche pricing. A full update on this will follow in the Tuesday, Oct. 15 edition of The Duncan Banner.
• Awarding a bid to Hope Equipment and Construction for additional walls to be built in the New City Hall building for a total of $11,721.
• The purchase of various transformers to be used in the electric distribution system for a total amount of $37,426.
• The use of Mark’s Trenching for boring on Carriage Drive with a cost not to exceed $40,000.
• Purchasing two MTX Rammers for the street department from Paramore Supply Co. for $5,040.
• Fulfilling pay request No. 11 for $6,100 for services rendered on the Chisholm Trail Parkway 16-inch waterline project.