ZACHARY — With sewer improvements under construction in one area of the city, Mayor David Amrhein and the City Council are hoping voters will approve a $9.3 million bond issue on Oct. 22 for much more sewer work.
“We’ve got a lot of infiltration. We’re sending a lot of rain water down to the (city-parish) North Sewage Treatment Plant,” Amrhein said in explaining why new sewer lines are needed in many areas of the city.
“We’re trying to eliminate raw sewage from coming out of the manholes when we get a hard rain,” he said.
The state Department of Environmental Quality has agreed to lend Zachary the $9.3 million at 0.95 percent interest over a 23-year period. Voters will see the interest rate written as “not exceeding 1 percent per annum” in the official ballot proposition.
“I want people to know this is not a tax,” Amrhein said. “It has a 23-year payback, but we hope to pay it off sooner.”
“It’s too good to pass up,” the mayor said of the low interest rate.
Unlike general obligation bonds that are repaid with property tax collections, the proposed bonds will be repaid from revenues of the city’s utility system through higher water, gas and sewer rates.
The rate hikes began Sept. 1 and will take full effect on July 1, 2013.
“If this thing fails, we’re going to have to do it anyway,” Amrhein said of the utility rate increases, which had been unchanged for several years.
If the city does not act while it has a chance to borrow the money at less than 1 percent interest, the U.S. Environmental Protection Agency or DEQ could order the city to correct its sewer problems at any time, the mayor said.
The governing bodies of many Louisiana cities are authorized to issue revenue bonds without voter approval, but that’s not the case in Zachary because a home-rule charter provision requires an election for all bond issues.
“We didn’t know it. Zachary’s never bonded money before,” said Amrhein, who took office in January.
The mayor and council discussed putting a charter amendment on the ballot this year to do away with the requirement for elections on revenue bond issues, but they decided against it.
“We may do it later,” Amrhein said.
Earlier this year, the council awarded a $1.6 million contract to Greenbriar Digging Services of Brookhaven, Miss., to improve sewer lines in the area of 39th, Nelson, Noble, Robert, Cherry, Chestnut and Hancock streets.
Amrhein said the city received a state grant for the work, which includes replacing residential connector lines that now run to city sewer lines at the rear of the lots, instead of to sewer lines in the front of homes.
The lines are part of the original city sewer system installed more than 50 years ago, Amrhein said.
Amrhein said the utility rate increases also are needed for other improvements in the coming years.
“We need another water tower, and we’ve got to upgrade our natural gas metering station on Mount Pleasant Road,” he said.
“I don’t mind borrowing money. We’re going to be aggressive in fixing our infrastructure problems,” Amrhein said.
Under the new rate schedules, customers in the city:
• Are now paying a $13.69 minimum monthly fee for gas, plus $3.42 per thousand cubic feet of gas consumed and a fuel adjustment charge based on the city’s cost for natural gas.
Beginning July 1, 2012, the minimum gas charge will be $13.86 per month, and the usage fee will be $3.52 per thousand cubic feet.
On July 1, 2013, the minimum will be $14.03, and the usage fee will be $3.62 per thousand cubic feet.
• Are now paying $8.94 monthly for water, plus $1.67 per thousand gallons consumed. The monthly minimums and rates will be $9.83 and $1.84 in 2012 and $10.73 and $2.01 in 2013.
• Are now paying $11.30 monthly for sewer service. The price will increase to $14.94, effective July 1, 2013.
The sewer fee is separate from a sewer user fee charged by the city-parish for treating Zachary’s sewage.
“We don’t have anything to do with that,” Amrhein said.