The City of Kalispell took advantage of reduced interest rates through the Montana State Revolving Fund loan program and refinanced five loans for past water- and wastewater-treatment system improvements, saving $2.3 million in the process, the state announced recently.
Charlie Harball, Kalispell City Attorney who served as interim city manager when the city restructured its SRF loans, said the long-term benefits for the city are environmental as well as financial.
“It’s a big reduction in our debt service and that’s an obvious benefit for residents,” Harball said in a news release. “Along with that, we improved our wastewater treatment technology. We’re keeping more nitrogen and phosphorous out of the Flathead Basin.”
Between 2001 and 2007, the city obtained five loans worth $19.4 million through the State Revolving Fund. Three of those loans financed expansion and improvements to the city water system, while two others paid for improvements to the wastewater treatment system.
Kalispell Public Works Director Susie Turner said all of the projects were driven by the city’s rapid population growth and development between 2000 and 2008.
“We required more capacity to meet demand for wastewater and water services, along with minor upgrades to the wastewater treatment process, allowing Kalispell to meet higher water quality standards and replace aging pipelines and equipment,” Turner said.
Communities across Montana are similarly taking advantage of the state’s reduced borrowing costs and working with DNRC to restructure SRF loans, according to Anna Miller, finance advisor for DNRC’s Conservation and Resource Development Division.
As of April 30, 2013, a total of 23 cities and towns have saved more than $18 million.
Kalispell will also receive a new SRF loan to address a problem with its wastewater treatment system. Turner said the concrete lid on the facility’s digester is experiencing external cracks and leaking gases, creating unsafe conditions for city staff. The city hired HDR Engineering to develop a new cover design.
The total project cost is $1.4 million; the city’s loan will total $1.2 million at a 3 percent interest rate. Swank Construction of Kalispell was awarded the bid; Turner said the project should be completed by January of 2014.
The Montana State Revolving Fund is co-administered by DNRC and the Montana Department of Environmental Quality. DEQ oversees the technical implementation of each project while DNRC administers the loan.
Harball said the city was “extremely pleased” to learn of the refinancing opportunity, and said the SRF program is tailored to meet the needs of local governments.
“It’s much easier for municipalities to work with SRF than go out into the marketplace to purchase financing,” he said. “The process is simpler, and since all the parties involved are government entities, we speak the same language, which really helps.”