A project to improve water pressure and storage in St. Charles, which already doubled in cost last fall, tacked another $1 million onto its price tag Tuesday night.
Aldermen tentatively approved a plan to borrow about $8.9 million from the state's Public Water Supply Loan Program Tuesday night. The Illinois EPA administers the program to provide financing for public water improvement projects at interest rates well below the market.
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The city would borrow the $8.9 million at a rate of 1.995 percent if aldermen grant final approval to apply for the loan next week.
"I don't think interest rates get smaller than that," said City Administrator Mark Koenen in an interview.
The bulk of the loan, about $4.7 million, will fund the construction of a 1.5 million-gallon water tank near the intersection of Red Gate Road and Route 25. The cost is about $1 million more than the $3.6 million estimate given to aldermen in September when they placed the project on the city's to-do list. That $3.6 million was double the cost when the water tower was first envisioned in 2007 as a 1 million-gallon structure.
Staff members and aldermen agreed, at the time, that the need for expanded water capacity and better water pressure justified a larger water tower and higher cost.
The $3.6 million water tower would cost city residents about $6 more per year on their water bills. Koenen said he wasn't sure if water bills would increase even more now that the project has a $4.7 million cost.
But he explained the $3.6 million price tag didn't include costs to prepare the site and lay the foundation for the water tower. The cost only reflected the bill for the actual water tower structure. Once bid, the $4.7 million became the reality.
The remaining portion of the state loan will fund as many as three additional projects: a $2.9 million water main improvement on North 5th Avenue, which is already on the to-do list for this fiscal year; a $492,200 repainting of the 10th Street Water Tower, which has not been approved yet; and a $841,800 repainting of the Campton Hills Water Tower, which also has not been approved yet.
Applying for and receiving the full $8.9 million will not obligate the city to complete the two water tower paint jobs. It will merely make the funds available to the city if aldermen choose to move forward.