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Water and Sewer District finalizes financing package

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Phase 1 of the wastewater treatment plant upgrade is fully designed and construction is expected to begin in May. RENDERING COURTESY OF THE BIG SKY COUNTY WATER AND SEWER DISTRICT

By Gabrielle Gasser EBS STAFF

BIG SKY – The financing package for the wastewater treatment plant upgrade is almost entirely secured. At an April 20 board meeting, the Big Sky County Water and Sewer District voted on eight different business action items which included approval of a financial loan commitment letter, approval of a bond purchase agreement and approval of amendments to an interlocal agreement with Big Sky Resort Area District.

After learning that the State Revolving Fund did not have enough money available to fund the Wastewater Treatment Plant Upgrade, the district has been working with bond counsel Dan Semmens of Dorsey & Whitney to secure a loan from First Security Bank to the tune of almost $43 million. The final step to lock that in will be a bond resolution, which Ron Edwards, general manager of the Water and Sewer District, said they hope to have completed in the next few days. 

Edwards said this upgrade is necessary and it will double the facility’s daily capacity from 650,000 gallons a day to 1.3 million.

Funding for the upgrade project will largely come from three sources, the loan from First Security Bank, the district’s own money and BSRAD funds collected through the 1% for Infrastructure tax. The total cost of the project is estimated at about $52 million with infrastructure costs running at $47 million and various other contingencies such as engineering, and legal fees. 

Funding for the project could change, however, as House Bill 632, intended
to distribute funds from the Federal American Rescue Plan Act, makes its way through state legislature. The rescue plan awards Montana almost $3 billion
of the $1.9 trillion total, $500,00 million of which is earmarked for infrastructure projects.

In an effort to access those funds, BSRAD and the Water and Sewer District amended their interlocal agreement to pay for a lobbying effort in Helena. As per the agreement, BSRAD will pay for 60 percent of the $60,000 total and the Water and Sewer District will pay for 40 percent. The funds will be used to engage the services of Taylor Luther Group, PLLC in a lobbyist contract which will give the upgrade project representation at the state level. 

The lobbying contract was only part of the changes made to the interlocal agreement. There was concern over how ARPA funds could potentially affect BSRAD’s funding commitment of 60 percent of the upgrade costs or $27 million. Edwards explained that BSRAD’s one percent commitment hasn’t changed, but they did rework the agreement so that money can be accessed now to support work on the Canyon Project. Previously, the Canyon Project would not be funded until after the Water and Sewer District received $27 million for the plant upgrade.

Assuming the bond resolution documents are squared away in short order, Edwards said the board hopes to award a construction contract before the April 29 deadline and construction is expected to start in May after the district gives notice to proceed. The entirety of Phase 1 construction is expected to be completed in the summer of 2023.

The board of the Water and Sewer District has been working hard to get
to this point and a customer and community member who attended the meeting made sure to congratulate them on their hard work during a public comment period.

“It’s a huge step for Big Sky to get this plant going,” Edwards said. “It’s going to really improve our ability to treat our wastewater for all this reuse.”

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