Mount Olive to apply for funds from stimulus package to repair sewers
By Steve Herring
Published in News on March 24, 2009 1:46 PM
MOUNT OLIVE -- Town officials are hopeful that having a shovel-ready sewer rehabilitation project on hand and the support of the Clean Water Management Trust Fund will enhance the town's chances of receiving $717,000 in federal stimulus funds.
Town Manager Charles Brown last Thursday received an e-mail that the project had made the state's list of eligible projects, but that the town must apply for the funding by April 3. Within minutes Brown had e-mailed the town's consulting engineering firm telling it to proceed with the application.
There is still no guarantee the application will be funded.
Meanwhile, Brown is hopeful that the town will be able to apply some $81,000 already expended on emergency re-pairs and engineering studies and surveys for the project to any town match required to receive the stimulus funding.
"We don't think that (meeting the deadline) will be an issue because we already have the grant package with everything already together, the maps, all the expenses, all the construction estimates," he said. "I don't want to oversimplify it, but in essence it is pretty much just changing names at the top instead of it being Clean Water Management it is going to be the American Recovery and Reinvestment Act (the official name of the stimulus package) and resubmit it.
"If I have to, I will get in the car and go to Raleigh to sign the papers and hand carry it to Construction Grants and Loans. We will get it to them one way or another."
Construction Grants and Loans, a non-regulatory section of the Division of Water Quality that administers several funding programs for publicly owned wastewater treatment facilities, will administer the stimulus funding.
"Clean Water Management had funded our project initially for $717,000, but because of the budget cuts they had to face those funds were frozen," Brown said. "So we do not have access to those. However, there are a number of sources being looked at to replace that funding, but they have to be projects that are shovel ready, in other words projects that are ready to go. Projects you can proceed with to go to bid immediately."
The town hopes to use the stimulus funding to offset the amount lost when the CWMTF coffers were raided by Gov. Beverly Perdue in her efforts to balance the state's ballooning budget deficit that is projected to top $3 billion by next year.
The stimulus package loan/grant mix is not as attractive as the CWMTF grant, but the town's need for extensive sewer repairs is driving the decision to seek the funding.
Brown had planned to attend a public hearing last week in Raleigh concerning the state's intended use plan and guidelines for the stimulus funds, but was unable to do because of another meeting that lasted all day.
A representative of the town's consulting engineering firm did attend the hearing and briefed Brown.
Basically, Brown said the information at the hearing was that $1.6 million had been included in the state's project list for the Mount Olive's project. One-half would be in the form of a zero-percent interest loan repayable over 20 years. The other one-half of the principal would be forgiven, another way of saying grant, Brown said.
"The zero-percent loan is not as attractive as it might have been when it was all grant funding, but we were going to have to come up with some money as a match on the Clean Water Management grant anyway," Brown said. "This is not as big a hardship as it could have been and the fact they are doing it as zero-percent loan makes it manageable."
To help relieve the burden the town will seek the entire $1..6 million but rather just enough to recoup the $717,000 it would have received from the CWTMF. That will break down to a $358,500 loan and $358,500 grant.
"Even if we get a $358,000 grant there will still be some matching funds required to go towards that," Brown said. "They have granted us permission initially to use the money we have spent on emergency repairs and things of that nature to allow us to use that as our matching funds.
"It'll be money that we will not have to come up with again. They won't give us the money back, but we wont have to put it out again as our matching fund."
The emergency repairs included fixing a collapsed sewer line and a manhole that had shifted out of place.
"Those were things that had to be done to the sewer system that couldn't wait until this project went to bid and was under way," Brown said.
Grant matches are normally 10 percent of the grant which in this case would be about $36,000.
"I think we will cover that," Brown said. "I really feel like as cooperative as they are being right now that they will allow us to use that. Maybe we can reduce the loan amount for example by the amount of the money that we have already spent because that's money for work that has been done on that project. If we could reduce the loan amount and also use it towards our grant match that would help us a lot."
Brown called the sewer project the "down and dirty" part of working on the sewer system.
Meanwhile, the town remains hopeful of receiving another $1.5 million for a new force main near the old Burlington Industries plant along N.C. 55.
A new force main would allow the town to move wastewater to the treatment plant without it all being funneled through a line that runs under the downtown area. It also would pay for two new lift stations and the relocation of another.
Brown was complimentary of CWMTF officials and Chairman Phil Baddour Jr. of Goldsboro for the "tremendous amount of work trying to get these projects funded still.
"They have identified the project that we had planned as shovel ready making it eligible under the Recovery and Reinvestment Act," he said. "I don't think we can give that group enough credit for what it has done.
"I would have to compliment him (Baddour) and his staff for being on top of this situation because they immediately, as soon as the governor identified the cuts that were going to be necessary, they began working trying to help municipalities who had projects identified and find funding for those."
He added, "So I think the fact that they have made Construction Grants and Loans aware of the fact we had that project funded and have identified our project as being eligible and ready to go, I feel cautiously optimistic that with their backing we will be able to get that funding restored."