This update is the second of three updates planned for the summer of 2024 to provide Solon residents with information about the new wastewater treatment facility that will be constructed in the coming years for the City of Solon. The timeline, from early discussions that improvements are needed, to the completion of a newly constructed plant, will span several years. This wastewater treatment facility update series will help residents better understand the research, planning, costs, and overall project timeline.
Recap of Part 1
The decision to build a new treatment facility vs. a remodel or upgrade to the existing treatment facility came after extensive evaluation by city engineers. The age of the current facility, limited space, flooding issues, and more restrictive limits on wastewater discharges have steered the decision for a new facility. In 2023, the city purchased approximately 21 acres of hay field adjacent to Oakland Cemetery along Hwy 382 and will be the location of the new treatment facility.
Financing of a New Wastewater Treatment Facility
City engineers have indicated that the city can expect the cost of the new treatment facility to be around $27.5 million with the actual cost of the new facility unknown until the IDNR has reviewed the design and construction bids are received. City officials have been fiscally planning for the new treatment facility for some time to ensure the best financial scenario possible.
The State Revolving Fund (SRF) is a state of Iowa program that provides cities with low interest loans for water and sewer related projects. In addition to a low interest construction loan, the SRF also provides no-interest Planning and Design Loans which help cities fund the costly design phases of the new treatment facility project. The City of Solon received an SRF Planning and Design Loan in May of 2024 for up to $3 million dollars. The Planning and Design loan will be combined with the construction loan at the appropriate time. The SRF loan will be repaid over a 20-year period.
Northland Securities provides financial planning services for the City of Solon and has worked with city staff and the Finance Committee on financial planning for the $27.5 million dollar facility. Northland has recommended a three-tiered approach includes:
1. A 20-year bond from the SRF program for $20M with payment to be paid by sewer bill revenues. As a regular practice the city council increases water and sewer rates 2% annually in July of each year. In addition, the $5 monthly sewer debt collected each month will increase to $10 monthly in July 2024.
2. A 20-year bond from SRF program for $5M with payment to be paid by TIF, LOST or Debt Service Levy.
3. Use Reserve cash on hand of $2.5M toward the overall project cost. LOST funds received in past years are currently held in high yield CD’s in anticipation of the new facility.
What can Solon residents expect next?
Part 3 of this series in August will look more closely at the nuances of wastewater treatment facilities along with the type of research and planning involved in designing and construction of a new facility.
Project Timeline
The timeline below provides a snapshot of the project timeline for the new wastewater treatment facility with completion expected in June 2029.