ELKHART — The city of Elkhart is looking at borrowing $20 million to $25 million for the combined sewer overflow project.
The city is focusing on the availability of money from the state's revolving fund program for wastewater projects that would be used for a handful of projects.
City officials had already initiated design work on two storage tank projects and had planned to pay for those projects with money generated from a recent utility rate hike. One of those projects is near the intersection of Waterfall Drive and Jackson Boulevard. The other is near the Elkhart Environmental Center, according to a press release.
The option of borrowing money for the projects came after discussions with state officials and financial advisors, the statement said.
“A bond issue of this magnitude will allow the work to begin this year on several treatment plant upgrades in addition to the two tank projects,” the statement said.
Mayor Dick Moore announced earlier this month an interest in looking into the idea, and the city's board of works approved plans last week to submit initial paperwork with the state office that oversees the state revolving fund.
Anticipated low project costs and continued low interest rates are reasons to consider the move, Moore said in a statement.
City officials “believe that it makes good financial sense to try and get more projects started this year than originally planned,” Moore said. “Being able to capitalize on the very low interest rates and competitive construction prices translates into significant savings for the rate payers over the next 20 years.”
Representatives of the utility department were told by Crowe Horvath, a national accounting and consulting firm with offices in Elkhart, that a bond the size the city is considering could be secured without a rate increase at this time.
The city approved plans for a series of sewer rate hikes in late 2012 that will see monthly bills for people who use Elkhart's sewer system increase an average of $4 a year over a three-year period.
The combined sewer overflow project was mandated by the federal government in an effort to reduce the amount of sewer water that flows into area waterways. The total cost is estimated to be more than $100 million spread over a 20-year period.