After much delay, the $12 million expansion and equipment revitalization project that the Clear Lake Sanitary District Board of Trustees decided to undertake in 2021 is rapidly nearing completion. The project entailed the purchase of new equipment to meet the Iowa Department of Natural Resources’ nutrient reduction requirements as well as the increased growth of the Clear Lake area. Part of the project included the construction of an additional 1.5 million-gallon sludge storage basin as well as a new building for a new sludge thickening process.
“With the area around Clear Lake expanding we are having to treat more waste than we had before. We're producing more sludge as the end product,” said Mitch Hanson, Administrator/Superintendent for the Sanitary District. “We used to only have a million gallons of sludge storage and we were reaching the limits. So we expanded and now we're adding another 1.5 million gallons.”
The stored sludge, pumped in from the entire District’s sewer system, goes through the process of “thickening,” which reduces the volume of water with the aid of blowers that feed air into the SBR Basins to keep the treatment bacteria active. The finished product is a treated biosolid, which is then contracted out to nearby farmers for use on their crop acreage.
“Our thickening [equipment] and our blowers and everything is over 20-years old,” said Hanson as he explained some of the new equipment that has been purchased. In addition to new blowers and a larger mixing system, and pumps to improve the biosolids process, they have updated electrical controls at three lift stations and equalization basins.
All of this has been done to meet the 2015 nutrient reduction strategy guidelines established by the Iowa DNR. “We have a permit with them that we have to renew every so often…ours is wastewater and it gives us treated limits that we can discharge into the creek and we have to abide by them,” Hanson said. “We have super clean effluent water because our water is used for water reuse over at the Emory Power Generation Station six miles away. They use our water after it's been treated for “cooling water” and then it comes back here again. We treat it in one of our filters and then we discharge it.”
Hanson said that “total nitrogen and phosphorus” is one of the big talking points for nutrients right now. “We don't have issues with total nitrogen. We're number three in the state right now for treating total nitrogen. But phosphorus is the biggest thing and that's in the sludge. So we're changing our thickening process to keep the phosphorus in the sludge instead of being in the effluent discharge.”
“We’re just trying to remove the nutrients…So if we can remove them and the farmer can benefit from it, that's less nutrients the farmers are putting on their field,” Hanson said.
Knowing this was going to be a large and important project the Clear Lake Sanitary District Board of Trustees issued a General Obligation Bond of $6.7million, over 75% of the project’s cost estimate prior to bidding, in November 2021 to take advantage of low interest rates of just over 1.03%, and to get the bond on the tax roll. Then inflation skyrocketed.
When they finally bid the project out in December of 2022 the base bid, with two alternates, “…came in at like $11.9 million. The GO bond we had borrowed was $6.7 million, leaving us about $5 million short,” said Taylor Moore, Sanitation District Finance Director.
“We have close to $1 million that we’re investing of our own money that we had budgeted for this project,” Hanson said. Plus, they located and were able to borrow up to $4.9 million from the Iowa Finance Authority through a new private loan program called the Water Quality Financing Program at a rate of 1.75%.
Instead of being another general obligation debt Hanson said that this loan stipulates that the pay back is through a revenue bond. In other words this loan will be repaid by sewer use. “So that means we have to increase our rate… One of the things we did is increase our consumption rates, but we also increased our base rate… to help pay off this loan faster,” Hanson said.
So, the base rate was increased to $18.83 and Clear Lake residents will see a gradual increase every six months until it increases to $22.83, a total base rate increase of $9. “The whole idea of not completely raising the base rate all the way up right away is because we might get to a point where we are under budget on this project and we don't need to borrow that much. Then we will keep the base rate where it's at,” Hanson said.
Moore said the term of this loan, issued in July 2023, is for nine years. They will begin paying it back in June 2025 with the final payment in July 2034 or possibly sooner.
