The saga of the new water system for Montross has been a long one. Over the course of the last year, the focus had been on getting enough surveys turned in so that the town could qualify for extra-low-interest loans and grants.
At June’s Town Council meeting, Town Manager Patricia Lewis had Tara Delaney from the USDA on hand, albeit via computer, to speak and give a presentation on the current circumstances. The Department of Agriculture is who the town has to send the preliminary engineer’s report. That bit was done, but according to Lewis, some adjustments are needed.
“We are very close to submitting this application,” Delaney explained, “and I’d like to get it funded this fiscal year, which means we need to get it to the state office within the month.
“One of the reasons I’d like to do that is because the interest rate is coming down again,” she continued. “The last time, we thought it was going to be 1.875% for 40 years, but it looks like it’ll be coming down to 1.75% over 40 years.”
Delaney presented two options, the first of which was estimated to be $3,495,000 at 1.75% over 39 years, while the second option was $3 million at the same rate for the same time period. The second option also would also include an applicant contribution of $495,000. The result of such a contribution would be to drop the payments from $10,310 a month to $8,850 a month. The beauty of the setup is that at any time, the town can change from option A to B, as long as it’s done before the deal is closed, even during construction.
“We can amortize over 39 years in order to give a year without payments. This would then give the town about three years to bump rates up incrementally,” she explained further.
Water rates thankfully would remain low compared to neighboring counties, coming in at an estimated $32-$33 per EDU (equivalent dwelling units) per month. Considering that there are 292 total users on the water system clocking in at 417 EDU’s; that is an extremely low rate. To put this in perspective, another project in Deltaville that Delaney is funding has a water rate of at least $45 per EDU, but usually it’s upwards of $53.
“I know this will be kind of a shock,” Delaney explained, “but it gets you closer to being in line with the rates of your area, and it starts to allow you to put more towards taking care of your system.”
Lewis chimed in a little bit later, noting, “The good thing about this is that we can gradually go up instead of all at once.”
The plan for now is for Lewis to essentially market the plan to the residents; showing where the town was with its old system, how much money has been spent fixing water breaks, and what the long-term benefits of the new water system are.