GOSHEN — The city is preparing to apply for a loan from the state to fund $17 million in sewer system improvements.

Goshen City Council approved a preliminary engineering report Tuesday in preparation for applying for the loan. It also gave the mayor authorization to make the application, which Public Works Director Dustin Sailor said should be in the next few weeks.

Borrowing from the State Revolving Fund loan program means paying a lower interest rate, which Sailor said helps keep utility rates down. The loan has a 20-year payback term.

He said the state would rank the city’s application and decide whether to award the loan if it meets certain qualifications. He expects to hear whether Goshen is approved for the loan before the end of the year.

Council approved a five-year water and sewer rate hike in March 2018 to help fund the sewer improvements. The preliminary engineering report was finalized in June.

Major needs in the system include the wastewater treatment plant, which has a number of old, inefficient and energy-demanding pumps, blowers and other parts of the treatment process.

The aeration blowers account for much of the $30,000 in monthly energy bills at the plant, according to a presentation Sailor made to council in December 2017, when the needs were being identified and cataloged for the upgrade project. It was the first update to the water improvement plan since 1999.

“The 1970s was the last primary upgrade, so that was a significant portion. We had another upgrade in like ‘92,” Sailor said Tuesday. “And after 20 years of service every day, parts are wearing.”

The $17 million plan also includes the replacement of a segment of the Rock Run Creek sewer, which was installed in 1934.

“We’ll start replacing a portion of that. At this point we don’t have enough funds to take it all the way over to the east, so right now we’re looking at stopping, I think, around 5th Street,” he said.

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