Elgin will borrow $9.7 million for water and sewer projects

Elgin City Council members preliminarily authorized the sale of almost $9.7 million worth of bonds Wednesday to fund water and sewer projects. A majority of that amount will go toward improvements to the Airlite Water Treatment Plant that city officials say is overdue.

Though the amount of debt that will be issued is substantial, and more than has been issued in previous years for water and sewer upgrades, City Manager Sean Stegall said it qualifies as “good debt.”

“Debt that is issued to maintain your water infrastructure, I don’t think it gets any more core than that to the health, safety and welfare of residents,” Stegall said. “And improvements to Airlite are needed to maintain the overall integrity to the system.”

At the committee of the whole meeting Wednesday, Councilman John Steffen referenced concerns by residents that the cost of maintaining Airlite is due to westward expansion, a controversial push that has left some residents resentful. Stegall said the Riverside Water Treatment Plant was designed based on continued use of a fully functioning Airlite system long before any thought of western growth. Both systems work together to support the city’s needs, though Airlite is often targeted as a facility for the west.

“It’s to serve the entire city,” Stegall said. “It happens to be farther west than Riverside but that’s the only connection it has for western development.”

The Airlite Water Treatment Plant was built in 1964 and includes various parts that need to be reconstructed or replaced after decades in use. Investing in these fixes will also give the city the opportunity to expand the plant and maintain the reliability of its system, according to a memo prepared for council members leading up to Wednesday’s committee of the whole meeting.

Elgin plans to sell $8.695 million in general obligation corporate purpose bonds – which carry a lower interest rate than revenue bonds — to finance the fixes and upgrades to Airlite as well as annual upgrades to the water system. The other $1 million will be borrowed to continue with the annual combined sewer separation efforts by the city.

Board members voted unanimously to issue this debt and will give a final vote at the next City Council meeting, scheduled for May 25.