COLDWATER, MI (WTVB) – The Coldwater Board of Public Utilities Board of Directors approved two notice of intent resolutions on Wednesday night which inform residents that the City of Coldwater intends to issue debt ahead of a pair of major projects.
One debt will be issued for the removal and replacement of lead service lines.
CBPU Director Jeff Budd says these bonds are a little unusual as they are going to be 100 percent forgiven through a Federal grant known as Booker Funds. Once the city issues debt through the State of Michigan’s Drinking Water State Revolving Fund, the debt service on the bonds are completely forgiven in arrears. But Budd says the City still has to go through the same bonding process just like when any other debt is issued.
He added bond issuance costs and any potential engineering costs are not reimbursed by the Booker Funds, so there will be some expense related to the bond sale that will be paid out of cash on hand.
The CBPU is planning on using internal staff for the lead service line replacements. Construction is planned to start in the Spring and is scheduled to last for about three years. The resolution calls for the bonds not exceed $3.3 million.
The second resolution debt will be issued to construct new water mains and make improvements at the Water Treatment Plant. The initial engineering estimates are about $580,000 for water mains to be replaced on Michigan Avenue and Washington Street as part of road rehabilitation being done in that area.
There will be another $1 million of improvements at the Water Treatment Plant to convert from chlorine to sodium hypochlorite disinfection and filter valve improvements.
Engineering for these projects was approved at the July 2021 Board meeting and will cost about $300,000.
Budd says the balance of the notice of intent resolution covers financing costs and contingencies. He says these bonds are revenue bonds and will be repaid through the revenues generated from the system. Construction is planned to start in the Spring.
The final bond size will be determined when bids are received from contractors. The principal amount of the bonds is not the exceed $2.7 million.
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