The project is slated to begin in June.
“We’ve been doing some of the infrastructure in pieces, “ Komiske said. “This is the next giant piece. It’s a three-year-long project and will touch just about every piece of the treatment process. Plus, we have to keep the plant in service and meet our current permit obligations.”
Norman City Manager Steve Lewis said the city did a comparative analysis with traditional revenue bonds. Based on those figures, Lewis said “the rate on a revenue bond issue for the water reclamation project in today’s market would be in the range of 2.9 percent to 3 percent for a 15-year term and require additional issuance expenses associated with a revenue bond offering. These additional expenses include underwriting fees, rating fees, additional legal fees and other costs rolled into the bond issue amount.”
At 2.9 percent and with the required additional costs, the revolving fund loan would result in a debt payment savings of approximately $2.96 million over the 15-year term of the loan, according to city staff estimates.
Lewis said the financial analysis indicates the State Revolving Fund is the most cost-effective way to fund the project. The loan will be secured with a lien on the revenues of the water and wastewater system.
“We’re very conservative and very frugal with our funds. We’re saving our customers a lot of money by using the State Revolving fund,” Komiske said. “It’s good for everybody.”
Since 1983, the Oklahoma Water Resources Board has approved more than $3 billion in loans and grants for water and wastewater infrastructure improvements throughout Oklahoma.
“We are grateful to the state legislators of the Norman community for their support of our financial assistance programs,” said J.D. Strong, executive director of the OWRB.
Lewis said another advantage of the state loan program is that the loan is set up as a line of credit with interest charged on funds only as they are drawn down. This practice minimizes interest costs during construction.
Additionally, most other funding programs require reserve funds, while the State Revolving Fund does not.
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