MARENGO – City officials want to borrow $3 million and refinance $1.97 million of existing debt to pay for various water system upgrades that shouldn't force aldermen to raise Marengo residents' water rates.
The money would be used to build a new water well and treatment facility on Marengo's west side, replace deteriorating water mains that date to the 1950s and connect dead-ended mains at various locations in Marengo, said City Administrator Gary Boden.
"We are really focusing on the existing water users," Boden said.
The City Council in June is expected to authorize the sale of bonds that will kick start the water system projects, which could be completed within two years. The council will hold a public hearing May 27 on the financing plan.
It would capitalize on low interest rates and take the city's remaining debt for sewage plant work – done in 2003 – and couple it with $3 million in new debt officials will have to pay off by 2034.
Debt payments would be structured in a way that would prevent water rate increases, Boden said.
The move allows the city to reduce those annual water and sewer debt payments from $535,000 to $415,000 by 2019. By 2023, those payments will be cut by another $130,000.
"We consciously put together this proposal with the understanding that we were not going to raise rates," Boden said.
Of all the water system projects on the city's radar, the new water well and treatment facility are the most detailed. The additions would improve distribution throughout the city and better cleanse water flowing through the city's system.
The new well also would tap into a large water source officials discovered in 2012 that could eventually help the city expand its western side.
If the council authorizes bonds in June, officials could begin work on replacing the 1950s water mains later this year, Boden said.