NICK GOSNELL
Hutch Post
HUTCHINSON, Kan. — The public hearing was held on Tuesday for the loan from the state revolving loan fund to work on a water line replacement project in the city of Hutchinson.
"Staff is planning to submit an SRF loan application for our 2024 water line replacement program," said Public Works Director Brian Clennan. "A couple of reasons for wanting to go through this process. One is the loan through this SRF program is about 60% of the market rate. Right now, we could get a loan for about 2.3%, the interest rate of 2.3%. The second thing is, this water line project does qualify for some prinicipal forgiveness of up to 30% of the project. It's capped at $1 million. We could be looking at potentially up to $360,000 of principal forgiveness. I have been told, that most likely, based on where our project was ranked and other projects ahead of us, most likely we won't be eligible, or that money would run out before it gets to our project, but there is a chance to get some of that."
The situation with the underground water infrastructure continues to deteriorate.
"We've got about 310 miles of water line that serve this community," Clennan said. "Over the last five years, we've averaged 60 main breaks a year. The last few years have been particularly challenging. 82 main in 2021, 81 main breaks in 2022, and so far this year, we've had 65 main breaks."
Unfortunately, the water system is not bringing in enough revenue to keep pace with how much line should be replaced each year. There should be 3.4 miles of line replaced each year, but they only have enough money to make the payments to replace 1.4 miles of line right now.
"We do have rate increases proposed through 2027," Clennan said. "Hopefully, every year, we're going to be able to invest just a little bit more into the replacement program. It all depends on costs and we haven't bid our 2023 project yet. I'm very anxious to see what those construction costs come in at. That's going to tell us a lot about what he had planned to do and whether or not we're going to be able to execute that plan."
The loan is for an amount not to exceed $1.2 million. The motion passed unanimously.
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