Rector City Council Tables Water System Improvements

Thursday, November 24, 2016

A number of concerns were raised by Rector City Council members at the special session held Tuesday, Nov. 15, on the water system improvement project. The purpose of the meeting was to decide on an engineering firm with which to contract. However, the latest Request for Qualifications (project bid) did not produce additional bids. As a result, Horner and Shifrin remained in contention from the original bid.

One member was concerned the bid was not advertised beyond the local newspaper, while another had visited with an engineering acquaintance and now felt a bit hesitant at the proposal Horner and Shifrin had presented. But then again, concerns were aired that if the proposal was not accepted, the loan interest rate would be higher in the future, or the city's ability to obtain another grant/loan package would not be available in the future. Also, there was the possibility of a large emergency need if the system wasn't replaced.

Mayor Teresa Roofe also voiced concern about a costly emergency system repair. At this point, she suggested, due to the $3.3 million loan and worry about repayment, the city could just revert to the original bid of repainting the water tower tank. This is termed a must-do item.

City superintendent Todd Watson said the water lines are old, some over 100 years, and he felt Rector was one of the last communities to update its system. "It is an expensive project, but the possibility of the lines lasting another 10 years is remote, much less another 25 years," he observed. Mayor Roofe agreed Rector "needed to be forward thinking." However, she continued to be concerned about the loan debt and what it meant to the town in the future, noting she felt it unfair to burden today's children in the future with the repayment.

Other concerns from the group included--

1. After paying $2,000 for a consultant fee to Horner and Shifrin, most of the promises were now "maybe" or "probably" oriented. To proceed further with the project, another fee of $26,000 for a final report is needed.

2. The original $400,000 for painting the water tower tank had risen to $6.6 million for a completely new system.

3. Was a second water tank actually needed to support the 914 households using the current system? Water tower tanks are inspected every five years. A back-up is needed when the tower is down, but Watson said the area wells would support the public's needs while the tank was out of operation for necessary repairs.

4. If no decision is made rather quickly, the city would lose the April, 2017, deadline for the Rural Development grant, and then would have to wait until October 2017 for consideration again.

Discussion then began on various solutions, and it was decided no matter who the financial lender is, a water rate increase is inevitable.

Due to the various concerns and uncertainty in final funding numbers, and because Horner and Shifrin has only presented one lender, the federal government, the council decided to table a decision. Several members volunteered to approach other financial institutions for options, and all agreed that funding repayment is a major concern, no matter what the interest rate is.

As the meeting closed, two things were made certain -- the water tower tank needs to be drained and repainted, and the water rates have to be increased. With the increase, money could be used toward a loan repayment, or to make emergency repairs if the $3.3 million loan is not taken.

At this point, the only other option offered would be to sell the water company to a larger corporation to manage.

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