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Posted December 11, 2012 | Leave a comment
Less grant money seen as issue for Strasburg plant project
By Alex Bridges
Bad timing may have hurt Strasburg's efforts to secure more grants for its wastewater treatment plant upgrades.
Town Council members have complained that Strasburg received a lower percentage in federal grants than other localities that sought to fund their projects. Less grant money means more debt for the town. But localities such as Woodstock began their efforts and brought their plants online long before Strasburg advertised its project for bid.
When the cost estimate stood at $24.3 million only a few months ago, the town expected to receive $4.7 million in grants, or less than 20 percent of the project price. Town Manager Judson Rex advised council members at a work session last week the funding agencies agreed to increase those amounts because the estimated cost of the project had risen by approximately $11 million.
Whether Strasburg lost a chance to secure more grants or a lower price on the project remains undetermined.
"In general, it does appear that there is less grant funding available now from the state and federal agencies when compared to five years ago," Rex stated in an email Monday. "However, interest rates are much lower now, which makes financing a project like this less costly."
Woodstock's upgraded wastewater treatment facility went online in 2010. The cost to build the facility came in less than the estimate given for Strasburg's plant. But Woodstock also secured funding and the project cost much earlier than Strasburg.
Woodstock's project cost $30.5 million -- $27.2 million for construction and $3.2 million for engineering, according to Director of Finance Mandy Belyea. Of the $30.5 million, the town received slightly more than $12 million in state grants -- or about 40 percent -- none of which required local matches. The town paid the remaining $18.5 million with two, zero-percent interest loans through the Virginia Revolving Loan Fund, made up of state and federal money, Belyea explained in an email.
Woodstock began engineering work on the project in 2005 and completed it in 2010. The poor economy and limited state funds prompted the state to pro-rate and defer grant reimbursements by 80 percent, Belyea explained. The state deferred only $90,198 in reimbursements because the project reached substantial completion by July 2010, according to Belyea. The town received the payment June 13 this year.
Meanwhile Front Royal also is moving forward on plant upgrades. The current estimated cost is $40 million to expand the current plant's capacity from 4 million to 5.2 million gallons per day, Town Manager Steven Burke said by phone Monday. The town needs to address the plant's capacity as well as its ability to adhere to stricter regulations on effluent released to tributaries that flow into the Chesapeake Bay.
Front Royal has received no confirmation from state agencies of any grant awards, Burke said. The town already has contacted the Virginia Resources Authority and secured funds through bonds, Burke explained.
Town officials anticipate advertising the project for bids soon, at which point they would learn the actual cost of the upgrade.
Around the same time as Woodstock began efforts to upgrade its facility, New Market took steps to address its facility and how the town could follow the new regulations to protect the Chesapeake Bay.
Instead of upgrading its own facility, New Market joined the towns of Broadway and Timberville, along with private processing firms, in a regional effort to handle wastewater. Broadway bought a former private treatment plant and the other parties came online. New Market Town Manager Evan Vass recalled the locality had to install a pump station and more than four miles of pipe to take the wastewater to the regional facility.
New Market decommissioned its treatment plant and gave up the related state permits nearly two years ago.
Contact staff writer Alex Bridges at 540-465-5137 ext. 125, or firstname.lastname@example.org
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