Streator seeks more info on $1.45 million oxidation ditch difference

The Streator City Council asked City Manager David Plyman last week to provide some more information before it decides whether to spend reserves or borrow money to make up about $1.45 million to complete an oxidation ditch update to the wastewater treatment plant.

Specifically, the council asked Plyman to present information regarding interest rates on the loan and how much it would cost the city in that time frame, versus other factors, including how much money unspent reserves may accrue.

As of last week, the City Council had not reached a consensus on a direction. The council met June 19 at the wastewater treatment plant for its regular meeting to get a tour of the facility.

The city is set to receive $1.2 million in federal grant funding from the U.S. Environmental Protection Agency and budgeted $800,000 in city sewer revenues for what it expected may be about a $2 million project.

Since the time of the grant’s application in April 2022 to May 2024, the cost of major equipment used in the low bid for the project rose about $450,000, and labor costs have increased, meaning the city’s forecast was about 10% to 15% low.

The grant has a July 1, 2025, deadline.

One option would be for the city to proceed with the project, using cash reserves to pay for it, but that would not come without the cost of stalling some other projects and depleting funds counted on for emergencies, City Engineer Jeremy Palm told the City Council previously.

The city could use $500,000 in 2024 and 2025 from its sewer depreciation fund. This would mean the city would need four fiscal years to return the fund to its current level of $1.5 million, Palm said. This would eliminate the small-scale sewer maintenance project in 2025, which involved the cleaning and lining of sewers; the Coal Run Creek/Unsewered Area Project from 2025 to 2027 would be reduced in scope; and wastewater treatment plan projects would be reduced in scope until 2029, Palm said.

Depleting these funds also reduces Streator’s ability to use cash on-hand for emergency sewer repairs, Palm said.

Another option involves borrowing money from the Illinois EPA low-interest loan program. This option pushes the timeline of the project back to 2026 and risks the possibility of additional price increases. The city also would need to get approval from the U.S. EPA to extend the timeline of the grant to July 1, 2026.

The earliest a decision could be made from the Illinois EPA on a Streator loan would be January 2025, but the city also would be eligible for forgiveness of one-third of the principle.

City Councilman David Reed said during the meeting he favored taking the loan, explaining he doesn’t believe spending all of the city’s reserves on the project makes sense.

“I’m looking at this like how I would handle a big expense on my own household budget,” Reed said. “And my gut feeling on this is that I don’t think it would be prudent to spend all of our reserves.”

An oxidation ditch is a type of wastewater treatment system that uses a large channel where sewage is continuously circulated. Microorganisms in the ditch break down waste, cleaning the water before it’s released back into the environment.

According to Palm, the motors and electrical equipment in Streator’s oxidation ditch are the originals from 1992. While they have been well maintained, the update would replace them with energy-efficient items that would reduce the plant’s overall energy consumption.

The city has until Aug. 7 to make a decision on what it will do.

In other items, the City Council:

Approved of an ordinance designating the west side of North Colorado Avenue from Kent Street to East Broadway Street as a no parking area.

Approved an ordinance designating the Twister Hill Park on Broadway Street parking lot a three-hour limit except during permitted events for the city.