City obtains state loans for sewer plant upgrade

The City of Whitefish has secured three state loans worth a combined more than $20 million to upgrade its wastewater treatment plant to meet more stringent standards for treatment.

Gov. Steve Bullock announced the approval of the State Revolving Fund loans last week. In addition to the loans, Whitefish also received a Renewable Resource Grant from the state Department of Natural Resources for $125,000 and Treasure State Endowment Program grant from the state Department of Commerce in the amount of $625,000.

City Council in December awarded the contract for construction of the plant to Swank Enterprises in the amount of $19.89 million. Full cost of the project including engineering and design, legal costs and contingency is $24.8 million, according to the city.

The new wastewater plant has been designed to bring the city’s plant into compliance with state standards and to serve the city through 2035 or a population of 20,000. Construction on the project has already begun and it is expected to be completed by summer 2021.

City Manager Dana Smith said the loans and grants assist the city, which typically utilizes such loans from the state for water and wastewater projects.

“The State Revolving Fund helps us obtain loans at a fairly low interest race and the amount of work that goes into obtaining them is less,” she said. “These keep costs down.”

Smith said previous utility rate increases have accounted for the construction of a new wastewater treatment plant, and having low interest loans and grants for financing of the project is a positive for the city and rate payers.

The city’s wastewater system has more than 58 miles of sewer main and 16 lift stations, portions of which are more than 100 years old.

In 2012, Whitefish was issued an administrative order from the state Department of Environmental Quality as a result of several violations of the city’s wastewater collection and treatment system. The city had been completing projects to deal with the issue since and in 2016 submitted a report to the DEQ detailing plans for a new treatment plant.

The new plant will bring the city into compliance with updated requirements for removal of ammonia, nitrogen and phosphorous as the community expands and demand increases.

To finance the project, Whitefish will borrow $20.1 million in the form of three SRF loans. The first two loans will carry an interest rate of 2.5% for 20 years; the third loan will be forgiven if certain conditions are met. The city has also committed $3.9 million in local funding for the project.

The Montana Department of Environmental Quality will oversee implementation of the project while DNRC administers the loan.

“Communities that invest in modern infrastructure, including drinking water and wastewater treatment systems, benefit now and for generations to come,” said Gov. Steve Bullock in a prepared release. “These projects not only create good-paying jobs for Montana workers, they better prepare our communities for new growth and development enhance the health and well-being of our citizens, and protect our soil, groundwater and surface water.”