Zachary to borrow $5 million more for sewer work

The City Council decided Tuesday to start the process of borrowing up to $5 million for continuing work on the municipal sewer system.

According to the resolution adopted by the council, the city would pay back the bonds over 22 years and borrow the money at an interest rate not to exceed 0.95 percent.

Bond attorney Jerry Osborne said the low interest rate was possible because the city intends to sell the bonds to the Department of Environmental Quality. The proposed loan would be in addition to $9.3 million the city borrowed from the DEQ at the same interest rate in 2012.

At that time, the DEQ approved Zachary for the extra $5 million loan, but the state did not then have the money to lend, Mayor David Amrhein said.

The city would borrow the money as needed for sewer improvements and the DEQ would be repaid from utility fee collection. In 2011, voters approved a gradual rate hike that allows sewer rates to be raised an average of $7 per month by 2014, while municipal gas rates would be raised by $6 month and water rates would go up by $9 per month.

Since voters agreed to amend the home rule charter in the October election, borrowing money for utility improvements does not require voter approval, as long as there are existing funds, such as the utility fees, available to pay back the money.

A hearing will be held on Oct. 8 to give voters a chance to express their opinions about the bond sale before the council makes its final vote, Osborne said.

In other business, the City Council voted unanimously after a public hearing to apply for another grant from the Louisiana Community Development Block Grant program and to hire a consultant to help with the grant application process.

In 2011, the city received $800,000 through the program, which was used for water line improvements in an area of town known as the Avenues as well as near Old Slaughter Road.

The competitive grant money is awarded partly based on the income levels of the residents affected and the consultant is needed to conduct a survey since municipalities are not allowed to use census data in the application, engineer Bianca Carambat said.

The city can apply for money to make improvements in a variety of areas of public infrastructure and this time it plans to focus on street improvements, she said.