Wasilla approves $6 million wastewater loan, but city says project is $4.6 million short

The Wasilla City Council approved a $6 million state loan Monday to upgrade the city's wastewater treatment plant, but the city's project manager said the project is still about $4.6 million short.

The nearly $13 million upgrade would add digesters, piping, a building for new blowers and equipment to remove water from sewage sludge, according to a state notice on the project. No one spoke at the public hearing.

The loan, from the state's Clean Water State Revolving Fund, forgives $1.4 million. The city would repay the other $4.6 million over 20 years with a 2.2% finance charge, according to the council agenda.

Council Member Ian Crafton asked whether the city had a plan to pay for the whole project. Project Manager Rick Antonio said the city has "a projected roadmap" but still has a deficit: "We're still short $4.6 million."

Crafton also questioned whether the loan was worth it. He said the forgiven $1.4 million nearly cancels out the finance charges, leaving the city about $88,000 ahead over 20 years compared with paying cash. Other council members suggested the city has been earning more on its investments than the loan costs, and one called it essentially borrowing at 0%. Antonio pushed back: "It is 2.2%, it's not 0%."

The city has about $4.8 million left from a $5.6 million federal grant it used for design, Antonio said. Another $4 million in federal money is possible, but the city isn't counting on it.

The council also approved a $199,625 change to its design contract with Stantec. Antonio said the project's cost seems to go up by a couple million dollars every six months, so the city wants to put it out to bid soon.