April 29, 2014

Last week the Iowa Finance Authority and Iowa Department of Natural Resources cut the interest rate on its Clean Water State Revolving Fund loans from 3 percent to 1.75 percent - a drastic drop that will save Carroll and neighboring cities more than $400,000.

The loans received through the fund are used to finance projects that improve Iowa's water quality, such as drinking- or wastewater-facility upgrades or pollution controls in local watersheds. Since the program was launched in 1989, it has provided more than $2 billion to more than 500 communities, according to a recent news release.

This rate reduction applies to all existing loans that are at least 10 years old. Local areas that will benefit include Carroll, which will save $391,512; Audubon, which will save $17,750; and Rockwell City, which will save $18,787.

Carroll's savings stem from an $8 million loan that was received 10 years ago for a construction upgrade to the wastewater-treatment plant and for sanitary relief sewer improvements throughout the city, said City Clerk Laura Schaefer. A second loan was received within a year for $3 million to assist with those projects, but has not reached the 10-year mark for the interest-rate reduction, she added.

Public Works Director Randy Krauel said the money saved through the reduction will be held for the next round of water-plant improvements. Krauel expects the DNR to place new restrictions on the Carroll plant when it renews the facility's operating permit, which expired in 2010. When a facility's permit expires, it continues to operate under its previous agreement - in Carroll's case, a permit issued nearly 30 years ago - until the department finds the time to renew it.

Krauel anticipates new requirements regarding the chlorination and disinfection of wastewater - a change that will require plant construction. He also expects to face new limits on nitrogen and phosphorus, which will require increased removal of these chemicals in the treatment facility.

The latter stems from ongoing conversations with municipalities and agricultural producers on how to reduce those chemicals in the waterways in response to the hypoxic zone in the Gulf of Mexico - an area in which increased nutrients in the water have encouraged algae growth that blocks sunlight and oxygen, creating a dead zone.

Carroll is home to one of 102 plants identified in the state for possible regulatory action, Krauel said, partly because of its size - more than 1 million gallons a day makes it the largest in the region - and partly because of its proximity to the Raccoon River Valley watershed, which supplies drinking water to a majority of towns in the area.

Finally, Krauel expects to conduct plant upgrades in the future to increase efficiency in its handling of sludge.

Audubon's savings stem from a $600,000 loan issued in 2003 for sewer-plant renovations.

Rockwell City's original loan was for $466,000, issued in 2004 to help the municipality dig a new well.