Palmerton residents can expect to see a substantial increase in their sewer rate bills at the turn of the calendar year.
Borough Council unanimously agreed on Thursday to adopt an ordinance authorizing the issuance of bonds to finance its $10 million wastewater treatment plant and related costs.
That means the borough will borrow $10 million through a 30-year loan to pay for the new wastewater treatment plant.
As a result, borough Manager Rodger Danielson said the monthly sewer rate is expected to increase $14.50, from $33.50 to $48, as of Jan. 1.
Danielson said the move will result in a $60,000 savings per year over earlier bond estimates, or $1.8 million worth of savings over the life of the 30-year span.
That the borough is able to build a wastewater treatment plant at those rates without the assistance of any grants speaks volumes, he said.
"The goal was to keep rates below $50 if at all possible," Danielson said. "I think this turned out very well for us."
Borough solicitor Michael Ozalas heaped praise on council.
"It's a good payback," Ozalas said. "The rates are very reasonable."
Councilman Richard Nothstein said he wanted to "commend those that got such favorable rates."
Danielson said the project got under way in May. He previously said the project was expected to take 18 months to complete.
In February, council agreed to adopt an ordinance to borrow the $10 million as part of a three-year general obligation note through First Niagara Bank at a fixed interest rate of 2.85 percent.
That came after council agreed in January to advertise for the first reading of the ordinance for the borough to utilize interim financing over two years. Danielson said at that time the interim financing would address additional costs for engineering services, construction contingencies and change orders.
That same month, council agreed to the intent to award the wastewater treatment plant upgrade project to KC Construction Company of Ivyland, Bucks County, after David Schlott, of ARRO Consulting Engineers, recommended that council award the contract to KC Construction Company, pending the approval of financing for the project and review of the contractor's bonds and insurance.
Schlott said the company was the apparent low bidder for the project, based on pre-cast post tensioned concrete construction, as its bid included a deduction in cost of $250,000 for the alternative, for a total bid of $8,350,000.
The project was bid as one general contract with all other trades being subcontractors to the general contract, Schlott said. The bidding included an alternate that was for the construction of the new sequencing batch reactor tanks using the pre-cast post tensioned method of construction, he said.
The three SBR tanks will be constructed using the precast concrete method and are the main treatment units in the project, Schlott said. The SBR tanks measure 42 feet by 122 feet, and are the largest tanks in the treatment plant, he said.
Afterward, council agreed by the same vote to hire ARRO for construction of engineering services for the project at a cost of $532,565.
Danielson said council last year approved ARRO for the design of the project at a cost of $337,000, which means it will pay the firm about $870,000 from start to finish.
Last October, council authorized the signing of a wastewater treatment plant consent order after it learned it owed the state Department of Environmental Protection $30,500 for the borough's deficient plant. Danielson said at that time the consent order was necessitated by the borough's outdated wastewater treatment plant, which had been cited by DEP for several deficiencies over the past several years.
In Aug. 2010, council approved the acceptance of Carbon County bond financing after county commissioners approved an interest reduction loan that will issue economic development bonds.
The bonds are available through federal stimulus money, also known as the American Reinvestment and Recovery Act.