$14.1 million in revenue bonds approved to pay for wastewater plant upgrades

By Kim McDarison

The Fort Atkinson City Council Tuesday, July 6, approved the issuance and sale of up to $14.1 million in sewerage system revenue bonds and a related $15.8 million financial assistance agreement. 

Documents shared within the council meeting packet included a letter to City Clerk and Finance Director Michelle Ebbert from the Milwaukee law offices of Quarles & Brady, LLP, offering for council’s consideration a resolution “authorizing the execution of the Financial Assistance Agreement and the issuance of Revenue Bonds to the State of Wisconsin Clean Water Fund Program.” 

According to the Wisconsin Economic Development Corporation (WEDC) website, the Wisconsin Clean Water Fund Program “operates a financial assistance program consisting of Federal and State Accounts. The Department of Natural Resources (DNR) and the Department of Administration (DOA) jointly administer the program under the Environmental Improvement Fund.”

According to the resolution and agreement approved Tuesday, monies received by the city from the Wisconsin Clean Water Fund must be deposited into a special fund designated “Sewerage System CWFP Project Fund,” with those monies to be used solely for the purpose of paying the costs, as stipulated within the agreement, of the city’s wastewater improvement project. 

The total amount to be loaned through the program to the city is $15,875,508. 

The document provides for a loan closing date of July 28, 2021, with a first payment due on Nov. 1, 2021 with an interest rate of 1.557%. 

A breakdown of project costs included within the agreement is as follows: preliminary engineering, $676,900; engineering/construction management, $1,105,515; construction/equipment, $13,385,000; charge orders, $17,843; contingency, $669,250, and loan closing costs, $21,000.

The agreement further allows for a “phosphorus priority principal” forgiveness amount of $1,000,000 and a “general principal” forgiveness amount of $750,000, making the loan’s net amount $14,125,508. 

A schedule showing payments against the borrowed principal begins in May of 2024 and ends in May of 2041. 

Information within the resolution states that prior to the passage of the resolution, no bonds or obligation payable from the revenues of the city’s sewerage system were outstanding. 

The resolution authorizes the sale of series 2021 (indicating date of issuance) Sewerage System Revenue Bonds in the amount of $14,125,508.  The amount represents a borrowing on the credit of the income and revenue of the city’s sewerage system. The bonds will be sold by the city to the State of Wisconsin Clean Water Fund Program, according to the resolution. 

As stipulated within the terms of the resolution: “the municipality deems it to be necessary, desirable and in its best interest to authorize and sell sewerage system revenue bonds of the municipality payable solely from the revenues of the (city’s sewerage) system.” 

Some history

On March 16, the Fort Atkinson City Council approved a bid of $13.4 million as submitted by Marshfield-based Staab Construction Corporation to perform Phase 2 work on the city’s wastewater treatment plant, 1600 Farmco Lane. The work, including improvements designed to meet new state phosphorus protocols, must be completed by May, 31, 2023, with the upgraded plant complying with new protocols by June 30, 2023.   

Also in March, the city identified additional monies that might be used to offset project costs coming through “cash-on-hand” in the wastewater utility’s reserve and equipment replacement accounts. 

Phase 2 construction work at the city’s wastewater treatment plant was anticipated in March to complete “over the next 27 months,” and included: 

• The replacement of existing raw wastewater grinders with new influent fine screens and wash presses.
• The rehabilitation of the influent wet well.
• The construction of a headworks area to be built over the existing wet well.
• The replacement of two existing influent pumps and the addition of a new fourth pump.
• The rehabilitation of two primary clarifiers.
• The modification of the aerations tanks.
• The replacement of two aeration blowers.
• The rehabilitation of two final clarifiers.
• The construction of a new tertiary filtration facility with chemical conditioning, followed by disc filters.
• Improvements made to the aerobic digesters.
• Improvements made to portions of the HVAC ventilation system within the plant’s Building 10.

A first phase of the project, coming at a cost of just over $1 million, was earlier completed. Phase 1 improvements were paid for using the utility’s equipment replacement and reserve funds. 

An earlier story relating to wastewater plant upgrades is found here: https://fortatkinsononline.com/city-accepts-13-3-million-bid-for-phase-ii-wastewater-treatment-plant-upgrades/.