Sales tax money to pay down sewer loan
March 11. 2014 1:05PM
City sales tax dollars will pay for the sewer extension project planned for this summer.
The Dell Rapids City Council passed a resolution Monday, March 3 to divert an estimated $72,000 in sale tax dollars each year for 20 years to pay down a $1.2 million loan issued in January by the South Dakota Board of Water and Natural Resources.
The loan will cover the cost of stretching sewer lines from where they’re capped now – near Garfield Avenue and Zero Street – to the corner of Garfield and Centennial avenues where a industrial park is planned.
Dell Rapids generated just under a $1 million in sales tax in 2013.
City administrator Justin Weiland said the choice to pay down the loan with sales tax allowed the council to avoid increasing sewer rates for Dell Rapids residents.
“We reprioritized the general fund budget to be able to afford that payment within the general fund budget,” he said. “The alternative was to dedicate it toward the sewer fund, but there would have had to be a rate increase.”
Because the planned work won’t directly benefit a significant amount of existing Dell Rapids residents, homes or businesses along south Garfield Avenue, Weiland said raising sewer rates wasn’t a palatable funding method for the council.
“You’re not tying in a great number of customers right now, it’s more for future impact customers, so the general sewer payers shouldn’t have to pay for that sewer extension,” he said.
The loan doesn’t just cover the sewer extension project. Some loan dollars will pay for analyzing the aging water and sewer pipes throughout Dell Rapids. The city will use cameras to get a look inside the oldest utility lines in town to discover potential infrastructure risks.
Replacing the eight-inch sewer along Beach Avenue under the railroad tracks will also be covered under the loan. L.G. Everest requested its replacement at a city council meeting in June 2013, citing safety concerns.