Sewer Phase II
By Stan Welch
In a special called meeting Monday night, the West Pelzer Town Council voted to accept an amended letter of conditions (LOC)governing their agreement with the Rural Development Agency for additional funding for the second phase of the town’s sewer system.
While it’s not often that the borrowing of additional monies to complete a project leads to smiles, a significant amount of good news emerged as the meeting progressed. Debbie Green, RDA representative, explained the changes made in the original LOC in order to acquire an additional $456,000 loan, as well as an additional $1,102,964 in grant funds from the RDA.
The town is currently making a monthly payment $1968 towards the original phase one of the sewer system upgrade. In addition, the original funds acquired for phase two will require a monthly payment of $2222 dollars. Added to that is an additional $1437 for the supplemental funding for phase two; for a total monthly payment of $5627, before any other costs of operating the water and sewer department are included.
But Green explained that the Town has inadvertently and unnecessarily been over funding an RDA required account called the short lived asset account. In fact, that account has more than twenty thousand dollars more than it is required to have.
Additionally, a reserve fund also required by RDA to ensure that a year’s worth of payments is always on hand has also been over funded by approximately ten thousand dollars. Councilman Jeanes made a motion to leave that account in its current condition, to cover additional reserve requirements on the new loans, which will kick in when the loans are actually closed. The Council voted unanimously to do that, as they did to accept the amended LOC.
Green also explained that while the interest rate for planning purposes was set at two and a half per cent, that rate is currently at 2.125 per cent; and while it could rise to the ceiling of two and a half, it will go no higher. Also, if it remains lower, that will be the rate applied at the time of the loan’s closing. That will lower the monthly payment.
Perhaps the best news is that the over payment into the funds during the last few years means that there will be no need for another increase in the town’s water bills.