June 22 – Waynesville leaders are awaiting news this month on a grant that will hopefully lessen sticker shock for a rebuild of the aging sewer system.
The city has been scrambling to fill a nearly $9 million funding gap after housing bids fell far more than expected last December. The price rose from a projected $19.5 million to $28 million amid skyrocketing construction and material costs. The loan that the city had secured was no longer sufficient to cover him.
In order to solve the dilemma, the city therefore started a three-pronged approach: a cost-cutting redesign, increasing the amount of the city loan and applying for a government subsidy.
In the meantime, however, the costs have increased even further. The original offer has expired and the new price is $1.5 million more than it was six months ago.
“While this isn’t good news, it’s not unexpected,” said Waynesville City Manager Rob Hites. “The increase in concrete and steel has increased dramatically since December.”
In the meantime, the city is under a de facto development moratorium until reconstruction is complete, likely in another 2.5 years. Due to the plant’s subpar performance and repeated environmental violations, the state imposed a cap on the new flow in the sewage plant.
The city has now reached that ceiling after a number of large-scale housing developments made their way through city-planning approvals last year — and consuming allotted capacity.
The city expects to hear the fate of its $15 million grant application any day to help with the cost of reconstruction. The state provided a pot of federal COVID relief funds for water and sanitation infrastructure projects by local governments, but the bulk was set aside for so-called distressed communities. Waynesville wasn’t initially on the list, but successfully lobbied to be labeled “distressed” — making the grant route a possibility.
To hedge against the grant, the city is also seeking state approval to increase its loan amount by $5 million.
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However, the loan itself would not cover the funding gap. So the city also worked with engineers to come up with a Plan B design that wouldn’t cost as much. State environmental agencies don’t like Plan B’s design that much and initially refused to accept it – insisting the city had to choose a version it couldn’t afford. Negotiations eventually led to a compromise.
“If we get the $15 million grant, we need to build the facility as originally designed,” Hites said. “If they don’t give us $15 million, we can’t afford it [it]we can take the lower number.”
The grant remains a lynchpin in the funding equation. If the city doesn’t get the grant due to recent cost hikes, even with the dual approach of increasing the loan amount and following the Plan B design, it will still fall short.
“As you can see, a lot of things are moving,” Hites said.