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Posted September 20, 2012 | 7 Comments
Town awarded larger grant for wastewater plant
Official: Larger-than-expected amount will translate into savings, more money for residents
By Alex Bridges - firstname.lastname@example.org
Positive news came to Strasburg officials recently as the town prepares to build a new wastewater treatment plant.
But the ultimate cost of the project remains unknown until the town selects a firm to construct the facility.
Strasburg had applied for a grant throught the Water Quality Improvement Fund, a program offered through the Virginia Department of Environmental Quality. Town Manager Judson Rex said he and other local officials expected Strasburg would qualify for about $2 million in grants for the project. However, town officials learned last week the DEQ presented an agreement to award Strasburg a grant for $3.18 million.
"That translates into savings for the town, less money that we have to finance and service debt over many years, so ultimately that's more money for the residents," Rex said.
Strasburg Town Council this fiscal year raised the water and sewer rates. While a larger-than-expected grant won't affect the current utility levies, the amount could help keep the town from needing to raise the rates as much as planned for future years.
"It will have an impact on it," Rex said. "We have a five-year budget program that we use to help project our rates and we have yet to plug the number in and calculate what the exact impact will be. But it will definitely have an impact.
Council has raised the rates incrementally over the past couple of years in preparation for the construction of the new wastewater treatment facility. Officials, in discussions last year, saw a projected rate increase of 6 percent, but Rex noted that levy was preliminary and Council likely will have to revisit the issue and see the impact of the extra state money.
Strasburg put out advertisements for bids on the project Sunday, Rex said. Bids from interested firms are due Nov. 1.
"The biggest impact is still yet to be, and we'll see Nov. 1, is what the bids come in at," Rex said. "That's going to have a big impact. Generally they come in a little lower than the engineer's estimate, but we just don't know for sure. It could come $5,000 less. It could $2 million less, so that will impact how the project plays out."
The last estimate included engineering costs, most of which the town has already paid, put the price of the plant at approximately $24 million. That cost estimate represents a reduction of about $2 million when the town went through value engineering analysis used to cut expenses on the project.
Strasburg plans to fund the project with grants and loans. In addition to the DEQ award, the town has $1.5 million in a rural development grant. The town will pay the remaining cost of the project through rural development financing and the state's revolving loan program. Strasburg has received approval for both financing options. Town officials should know the final number needed to secure the loans Nov. 1.