Home » Kentucky Infrastructure Authority approves eight loans

Kentucky Infrastructure Authority approves eight loans

FRANKFORT, Ky. (Dec. 6, 2016) — The Kentucky Infrastructure Authority (KIA) approved eight loans at its December board meeting.

KIA administers low interest loans for the construction, improvement and acquisition of sanitary sewer and water facilities and other types of infrastructure. Eligibility is based on a strategic project prioritization and a resource planning list developed between the state’s area development districts, the Kentucky Department for Local Government, the Kentucky Division of Water, the Kentucky Rural Water Association and utilities which participate in regional water councils.

Interest rates are based on the median household income (mhi) in the utility’s service area as compared to Kentucky’s statewide mhi of just over $42,000.

City of Liberty, Casey County

The Authority approved the City of Liberty’s request for an increase to a previous Fund A loan approved by KIA in May 2015. The original loan of $4,156,000 was augmented by $504,000, repayable over 30 years at a .75 percent interest rate, after bids for 16 project items in the project scope exceeded original estimates.

The upgrades and improvements to the wastewater treatment focus on addressing wet weather flows with the addition of a 1.5 million gallon flow equalization basin and a duplex submersible pump station for wet weather conditions. The project will also upgrade or replace plant components that have outlived their intended usage including the raw sewage flow meter and the grit removal equipment. A static screen, sludge treatment equipment and a blower will be added in addition to laboratory and office facilities with modern instrumentation and controls.

The project is designed to address issues listed in an agreed order reached in August 2014 with the Division of Enforcement in the Kentucky Energy and Environment Cabinet Department for Environmental Protection that included a $3,000 fine to be paid by the city.

Construction is scheduled to begin in February 2017. It is anticipated to take a year to complete.

The utility serves 875 residential and commercial customers.

Daviess County Fiscal Court, Daviess County

The Daviess County Fiscal Court was approved for a Fund A loan of $1,169,634 to build a replacement pump station and force main which will redirect wastewater flow to the Regional Water Resource Agency (RWRA) collection system. There is an urgent need for the new facility due to the abandonment of an aging package treatment plant that serves the Friendly Park and Green Acres Mobile Home Park subdivisions. The RWRA has an agreement with the fiscal court to fund debt and reserve requirements for the project that will improve service for 92 customers.

The 20-year loan is repayable at a .25 percent interest rate. An additional $1 million to complete funding for the project has been secured through a Community Development Block Grant from the U.S. Department of Housing and Urban Development through the Kentucky Department for Local Government.

City of Louisa, Lawrence County

The City of Louisa’s request for a Fund A loan of $356,060 was approved for the planning and design for a sewer rehabilitation project. The loan is repayable over five years at an interest rate of 2.75 percent.

A 2009 sewer evaluation study of the entire Louisa system revealed that three zones were in need of repairs. Of the zones, the downtown area is considered to have the oldest infrastructure and the highest need for upgrades. Part of the loan will pay for camera inspection of about 23,250 linear feet of sewer line to determine what measures are required to address inflow, infiltration and some areas of storm water separation. Separating storm sewers from sanitary sewers should reduce the city’s wastewater treatment costs as well as reduce the risk of sanitary sewer overflow.

The system serves 1,821 residential customers and nine commercial customers. Because the service area population median household income (mhi) is $27,881, below the average of $43,342 for the state as a whole, the project qualifies for the 2.75 percent interest rate.

City of New Castle, Henry County

With the KIA’s approval of a Fund B loan of $445,000, New Castle will address issues with the city’s clean and drinking water systems. The loan is repayable over 20 years at a .25 percent interest rate based on the service area’s mhi that falls well below the state mhi.

About 5,100 linear feet of eight-inch clean water lines will be rehabilitated or replaced to correct areas that have significant infiltration and inflow issues which can be triggered by even minor rainfall. After several violations that began in 2012, the Kentucky Division of Enforcement in the Kentucky Energy and Environment Cabinet Department for Environmental Protection fined the city $2,500 for non-compliance of treatment processes and overflow. New Castle is working with the division to rectify issues with the aging system.

Nearly 1,000 linear feet of four and six-inch water main will be replaced in the distribution system upgrade at South Main Street/U.S. 421. The installation of new line will reduce water loss and maintenance costs in addition to improving system hydraulics and eliminating redundancies.

The first phase of the system improvements is scheduled to begin in June 2017.

New Castle has about 500 residential and commercial customers and is contracted with the Henry County Water District to purchase about 25 million gallons of finished water per year at $2.58 per thousand gallons.

City of Bardstown, Nelson County

The Authority approved the City of Bardstown’s application for a Fund B loan of $1.1 million for improvements to the water treatment plant. The 20-year loan is repayable at a 1.75 percent interest rate based on the median household income (mhi) in the service area as compared to the state mhi.

The project will improve the water quality output with the construction of new backwash systems for four filters in the plant. More than 1,300 linear feet of various sized lines will be installed as part of the project. The disinfection process will be improved by the addition of below-grade chlorine lines and site safety will be enhanced by the removal of the above grade lines.

Four utilities that purchase water from the Bardstown plant have been issued notices of violation from the Kentucky Division of Water for disinfection by-product levels.

Construction is scheduled to begin in April 2017 and take about four months.

The system serves a combination of 11,034 residential, commercial and industrial customers.

City of Bowling Green, Warren County

Bowling Green was approved by the KIA for two loans that total $6.8 million. A Fund B loan of $2 million for the engineering design and a construction portion of the Bowling Green Municipal Utilities’ water treatment plant alternate disinfection project is repayable over 20 years at an annual interest rate of 1.75 percent. A Fund C loan of $4.8 million was granted for the city’s application for another portion of the utility’s disinfection project. The C loan is repayable over a 30-year term at a three percent interest rate.  The loan is designated for engineering fees, construction and contingency.

The existing disinfection system has exceeded its useful life and presents safety risks that require mitigation. The project is designed to enhance community safety by eliminating the need to transport and store chlorine gas.  A mixed oxidant generation system was selected for the improvements because of lower life-cycle operating costs, decreased disinfection byproduct formation and the benefits of more persistent residual disinfectant in the distribution system.

Construction is scheduled to begin in January 2017 and finish in March 2018.

The system has 22,032 residential and commercial/industrial customers.

City of Fleming-Neon, Letcher County

The Authority approved a Fund F loan for $1.5 million for Fleming-Neon’s water treatment plant upgrade project. The 30-year loan is at a .25 percent interest rate and is an outcome of a prior planning and design project also funded by KIA.

The improvements include the replacement of the water processing equipment, chemical feed system, electrical supply and system, a backup generator, roof and windows, and the replacement of a well pump in the raw water supply system. The existing equipment has reached the end of its normal service life and is in extreme disrepair with significant corrosion and numerous safety hazards. The project will improve water quality, address safety concerns and reduce energy costs through increased efficiency.

The city treats about 120 million gallons of water annually from a mine water source and serves approximately 1,300 customers in Letcher County.

Total cost of the project, scheduled to begin construction in June 2017, is just over $3.1 million.