PORTERDALE -- The City Council voted unanimously Monday night to move ahead with a plan to refinance $1.28 million in debt on the city's sewer system and borrow another $1.68 million to make much-needed improvements to the system.
Marty Boyd, the city's contracted engineer, told the council that the city could reduce its annual debt service by $20,000 by refinancing its 2007 Georgia Environmental Finance Authority loan through the U.S. Department of Agriculture's Rural Development Program. Boyd said in order to refinance the debt through USDA, the city would be required to borrow an amount equal to the amount refinanced.
The USDA loan would carry an interest rate of 2.25 percent, compared to the current GEFA interest rate of 3.87 percent, for a term of 40 years.
Because Porterdale qualifies under USDA's poverty rate, the city would also be in line to receive grant funds in conjunction with a loan. However, Boyd cautioned that federal grant dollars are dwindling and it could take a year or more for a grant to be awarded. To expedite the process, he suggested that the city move forward with a loan application only.
Boyd recommended that the city use the loan funds to make improvements to approximately 18,350 linear feet of old clay pipe, much of which is original to development of the mill village.
Porterdale Public Works Director Robert Witcher said Thursday that 60 to 70 percent of the city's sewer system is as old as 85 years. The system continues to function, he said, but it does have problems due to age and outdated technology.
"You've got the terra cotta pipes in 3-foot sections, and you have problems with roots getting into the system, and that's where the problems come in with sewer backups," Witcher said. "We really haven't had the spills."
Witcher said the system also has problems from infiltration due to old brick manholes that are deteriorating. Water flowing into the system leads to an increase in the city's costs for wastewater treatment.
The first step in the sewer upgrade process will be to assess the problems with the aging sewer lines by clearing them of roots and debris and videotaping inside the lines. This work could cost as much as $40,000, Boyd said, but the city could save money by having city Public Works Department employees use the city's newly purchased equipment to clear the lines.
"Once we know the actual problems, we can assign a cost of repair," Boyd said.
Boyd estimated that the total upgrade project could cost $1.68 million, including $300,000 for engineering, legal fees and other expenses. It might be necessary for the city to obtain interim financing to get the work started, Boyd said, but those expenditures would ultimately be covered by the USDA loan.
"Everything spent on the project is fundable through USDA," Boyd said.
Boyd also updated the council on the availability of grant funds for recreation projects through the federal Land and Water Conservation Fund.
As part of the National Park Service, the LWCF Program provides matching grants to states and local governments for the acquisition and development of public outdoor recreation areas and facilities.
Boyd said any grant funds received could be used to supplement other projects in Porterdale, particularly the historic Depot project. The grant application will be designed to "convey an overall vision for the Yellow River corridor," Boyd said.
Boyd said the application process will take place in two steps. Feb. 29 is the deadline to get applications to the state, where they will be reviewed and ranked according to likelihood of receiving funding. Applications will then be forwarded to the LWCF, with awards announced in the fall.