The St. Joseph City Council approved $67 million bond issuance from the state of Missouri's Direct Loan program to fund the Blacksnake Creek project.
The project is part of the city's Longterm Control Plan to reduce wastewater leaving the city through the Water Protection Facility and has been federally mandated.
The city is using State Revolving Funds to finance the project and was successful in extending their loan term from 20 to 30 years, and was granted a lower-than-typical interest rate of 1.25 percent. According to the Public Works Department, these savings led to a 2 percent reduction in the 11 percent increase in sewer fees that residents in the city saw this fiscal year.
Director of Public Works and Transportation Andy Clements said the amount that was issued includes extra for unforeseeable costs, and he is hoping that the series of projects that make up the Blacksnake project actually end up coming in below $67 million.
"We do have contingency built into our estimates, so that's incorporated in there," Clements said. "Our hope and desire is that we will not have to, in the end of all the projects, fully spend all of the credit line that's been extended."
Clements explained that State Revolving Funds are different than typical loans.
"With SRF it's very unique in that you only pay interest and have to repay the amount of funding that you actually use," Clements said.
At the council meeting, Council Member Barbara LaBass asked City Manager Bruce Woody if it would be possible to wait a month before they accepted the bond issuances in order to see if any national changes in environmental mandates take place.
Woody told LaBass that he fears waiting a month would put them off of their deadline to complete the project, which could result in repercussions from the federal government.
The bonds passed the council with a vote of 7-2. Council Members LaBass and Pat Jones voted against them.
Kenneth Reeder, a resident of St. Joseph's North Side, has been verbally outspoken against the project. At the meeting, he accused the Council Members of being uninformed and of "rubber stamping" the project through.
"This project here is absolutely horrible, absolutely horrible for the town and has long, longterm ramifications," Reeder said."It's so sad that you're going to let the fat lady sing, but she has not been given last rights yet."
Early work started about two weeks ago near the Remington Nature Center, where the tunnel that will extend from that area to Second Harvest Food Bank will start.
Clements said the actual tunneling work will not begin until the equipment arrives in April of 2018, and the work could last nine to 12 months.
