ELGIN – Elgin will move forward with a project to install new water lines and fire hydrants in the city’s older area, if the city can secure a loan to cover the cost.
The Elgin Public Works Authority voted 4-0 Feb. 11 to accept JC Utility Services’ bid to do the work for $747,662.48, contingent on financing and approval by the Oklahoma Department of Environmental Quality. The city would have 45 days to secure the financing.
The city is planning to install 6,600 feet of water lines and 15 new fire hydrants from First Street to Fourth Place and from Keeney Road to K Street.
Mayor JJ Francais originally recommended rejecting all bids for the project, based on their cost.
“The reason for it is that due to the price, we are going to have to put it into an FAP loan,” Francais said, using the abbreviation for a Financial Assistance Program loan. “FAP is a government- backed loan, which means it needs to be engineered.”
FAP loans are long-term, low-interest revenue bond loans that help communities with projects related to water and/ or sewer systems, according to the Oklahoma Water Resources Board’s website.
Francais said he had hoped the bid would be about $140,000 to $150,000 lower, which would have allowed the city to use a combination of capital improvement program dollars and a private bank loan to cover the cost. He said if the city seeks an FAP loan, the loan would be for 30 years and would have a much lower interest rate.
“Right now, we’re seeing interest at 4.2, 4.3 (percent) on the FAP side,” Francais said. “But the problem is that they require all projects to be engineered.”
He said the council could approve JC Utility’s bid contingent on financing, but the city would still have to go through the permitting process with DEQ. CIP fund The city taps its CIP fund to pay for capital improvement projects, such as buying cityowned vehicles. Francais said the city is currently using some of its CIP money to pay for a new fire truck, but that is the fund’s only obligation at the moment.
“That’s a healthy account,” he said. “I still wouldn’t want to use it all for this, because we still need a PWA building. We still need some larger projects.”
Francais said if the council approved JC Utility’s bid, he would start work for securing financing and DEQ approval for the project.
“I’ll report back next month,” he said. “If I can find financing and DEQ approval before that, then we’ll be ready to move before that.”