City-parish to use low-interest loan for sewer projects

The city-parish will use a $45 million low-interest loan to pay for four projects that are part of the Sanitary Sewer Overflow program, officials announced Friday.

The loan — part of the state’s Department of Environmental Quality’s Revolving Fund Loan Program — will have a .95-percent interest rate over its 20-year term, said Mark Leblanc, the Department of Public Works official who oversees financing for the SSO plan.

“If we had to borrow the money through normal means, we would probably have to pay three or three-and-a-half percent interest,” Leblanc said.

The low interest rate will allow the parish to pay off the loan in 20 years rather than the 25-35 for its other SSO bonds, Leblanc said.

The money was granted to DEQ by the federal government, Leblanc said.

Projects and amounts funded by the loan include:

• $17.2 million for Phase I and II of the Scenic Highway-Spanish Town Road Rehabilitation Project
• $6 million for the I-110 Hollywood Street Area Rehabilitation Project.
• $8 million for the East Blvd.-Government Street Area Rehabilitation Project.
• $8.6 million for the Choctaw Collection Maintenance Facility.

The four projects plus $200,000 in administrative costs bring the total cost to $40 million, Leblanc said.

Of the remaining $5 million, $4.5 will be used to improve the North Wastewater Treatment Plant and $500,000 to plant trees or other vegetation to build buffers around both North and South treatment plants, Leblanc said.

The Department of Environmental Quality will oversee the projects, Leblanc said.

“It’s worth it even if you have to deal with another level of bureaucracy,” Leblanc said. The city parish borrowed $8 million from DEQ in 2010, Leblanc said.

The sewer plan, called the Sanitary Sewer Overflow program, was put in place by a 2002 federal consent decree to address the parish’s crumbling sewer system. It is funded by a half-cent sales tax and monthly sewer fees.

The total projected cost of the program is $1.5 billion, which includes master-planning costs, DPW Director William Daniel has said.

The program has a federally mandated deadline for completion of Dec. 31, 2014.

Comments

1) Comment by phil - 14/07/2012

I think the title of this article might have been "City-parish to use ANOTHER loan for sewer projects". The city-parish government already has about $1 billion of bonds for this sewer project, and this loan just adds to the overall amount of borrowing being done for this project, in my opinion. We have been paying sewer fees and sales tax for many years just for sewer and now we are also having to get deeper into debt for another 20 to 30 years into the future to just pay for this sewer project.. This project has gone from about a $700 million to a $1.5 billion estimated cost. If you really think about it, even if the $1.2 billion estimate is correct, someone still needs to explain what happened to increase this project by another $300 MILLION.