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Sewer projects compete for stimulus

Sean Ryan
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Rhinelander’s $34 million stimulus money request for sewer system projects is on the bubble.

The American Recovery and Reinvestment Act is giving Wisconsin $105.9 million to parse out as grants to sewer and water-treatment projects. The state’s Clean Water Fund Program, which offers low-interest loans for wastewater projects, will distribute the federal grant money.

The stimulus money is a shot in the arm for the program because it receives many more loan applications than it can fulfill, a problem that forced the state to rank projects for loan priority. Before the stimulus money arrived, the state Department of Natural Resources accepted loan applications (PDF) for $1.25 billion in 2010 sewer projects.

The stimulus money is the first large increase in the loan program in years, but it comes with a new set of rules for municipalities competing for the money.

Rhinelander’s application got a score that would usually rank it right at the cutoff point for projects, said John Zatopa, the city’s water and wastewater utility superintendent. But there are many unknowns surrounding the ranking process for stimulus money, he said, so it’s hard to say if the additional money will improve the city’s loan chances.

“Everything they said to do, we got done,” Zatopa said. “Now, all we can do is wait and see for this ranking.”

Municipalities must have bid documents prepared for their projects by the June 30 stimulus application date and must put the work out to bid this fall. Under the DNR’s proposed rules for distributing the stimulus money, municipalities would get grants to pay for half of their project costs and Clean Water loans would cover the other half, said Jon Cameron, economic consultant for Ruekert & Mielke Inc., Waukesha.

“There is a big need for infrastructure funding, and, unfortunately, there’s not going to be enough money to go around at the end of the day,” he said.

Municipalities that want a shot at the stimulus money must pay to develop project plans with no promise that the project will get done, which is difficult, said Kory Anderson, Fall River village engineer and vice president of General Engineering Co., Portage. Fall River’s $476,000 application to the DNR earlier this year ranked near the bottom of the applicant list.

The DNR on Friday announced another new rule (PDF) for the stimulus competition by reserving $26.5 million of the $105.9 million in stimulus money for projects in counties with unemployment rates below the Wisconsin statewide average. Another $21.2 million will be reserved for green projects.

The Milwaukee Metropolitan Sewerage District is working on more than $100 million in projects and trying to figure out which will be ready by the June 30 deadline, said Robert Sander, MMSD assistant controller. Since Milwaukee County’s unemployment is hovering around the statewide average, the district does not know if the jobs will qualify for the $26.5 million set-aside, he said.

“I don’t know what the bubble is,” Sander said, “and naturally the DNR can’t say or estimate either.”
Rhinelander plans to appeal to the DNR to increase the city’s ranking and, hopefully, improve its competitive edge, Zatopa said.

“That could have a significant impact on whether or not we will qualify for the funding,” he said, “since there’s not enough money.”

Related Link: Legislative Fiscal Bureau report on Clean Water Fund Program (PDF)

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