Home » Brandenburg makes first use of P3 program bonds to fund infrastructure for $1.7 billion steel plant

Brandenburg makes first use of P3 program bonds to fund infrastructure for $1.7 billion steel plant

BRANDENBURG, Ky. – The City of Brandenburg is the first local government in Kentucky to fund a project using an innovative public-private partnership (P3). The city participated with the Kentucky Bond Corp. (KBC) in issuing bonds for a new $8.3 million municipal wastewater treatment plant.

The new plant was deemed essential after the Nucor Corp. announced its plan to build a $1.7 billion steel-plate manufacturing mill in an industrial park that includes Brandenburg’s existing wastewater treatment

“This is the kind of difference-making partnership that this legislation was designed to promote,” said Kentucky League of Cities (KLC) Executive Director/CEO J.D. Chaney.t plant. Even though government funds were scarce, Brandenburg had to move quickly. Fortunately, a 2016 law (HB309) authorized local governments to take advantage of public-private partnerships. The P3 delivery method allows private companies to participate more fully in local infrastructure projects, to include using private sector financing.

The new facility is the first P3 the Kentucky Local Government Public-Private Partnership Board has approved since the Kentucky General Assembly passed legislation in 2016 that allows P3s. 

KLC formed KBC in 2010 to help municipalities access the fixed rate bond market. Participants utilizing KBC benefit from a Standard and Poor’s AA- rating, achieved in part from the Kentucky League of Cities funded debt service reserve.

Brandenburg turned to law firm Frost Brown Todd (FBT) as their P3 consultants under FBT’s Master Agreement with the Commonwealth. FBT helped guide the city throughout the process, which included issuing a P3 Request for Proposals (RFP) to design, build, and finance the plant; negotiating the agreement; and facilitating the regulatory approval process.

The Walker Co., a Kentucky-based design and construction firm, in partnership with GRW Engineers Inc. and WP3 Consulting, was selected as the design/build contractor, while Ross, Sinclaire & Associates (RSA) provided the necessary financing in partnership with Kentucky League of Cities Financial Services and the KBC. 

The project is expected to open the door for other local governments to take advantage of the opportunities a P3 offers to improve water systems and other infrastructure needs. P3s allow private companies and public entities  such as a city council  to work together more easily in financing major infrastructure and other projects.

Construction of the new wastewater treatment plant is expected to take 16 months and be operational by June 2022.