CUC seeks $1.5 million loan from CDA

Pressed for time and money, the Commonwealth Utilities Corp. has asked the Commonwealth Development Authority for a $1.56-million loan to complete the much-needed upgrade of the Agingan Sewer Treatment Plant Outfall.

CUC is requesting the loan in an effort to comply with a Nov. 11, 1999 administrative order issued by the U.S. Environmental Protection Agency to improve the quality of water effluent being discharged into the ocean at the Agingan treatment plant. CUC must comply with the order by next month, or it will be subject to a fine of $35,000 per day for each violation.

The loan request was made even as CUC pursues funding from the Legislature and the U.S. Department of Agriculture.

CUC executive director Lorraine Babauta asked CDA to make the loan available upon completion of the project, which is expected to be on or about June 30, 2005.

“CUC is willing to commit to a 5-year repayment of the loan and [asks] that CDA offer a favorable interest rate,” Babauta said in a letter to CDA.

She also disclosed plans to create a revenue account dedicated to the loan. The utility firm plans to repay the loan through collections and a possible surcharge on the sewage fee, she said.

CUC has been planning the upgrade of the wastewater treatment plant for some time.

In 2002, the utility firm solicited bids for the construction of the outfall, but was not able to award the contract due to lack of funds.

Babauta reported that GPPC Inc., one of the original bidders, has indicated that it is willing to do the project at the original bid price of $2.84 million. GPPC has also expressed willingness to allow CUC to pay off the unfunded portion of the total project cost over time, she said.

Currently introduced in the House of Representatives is a bill that would provide $3.3 million for the construction of the Agingan ocean outfall and the upgrade of the treatment plant.

House Bill 14-286 seeks to reprogram the money from appropriations for the Kagman wastewater treatment plant.

According to H.B. 14-286, the cost to complete the Agingan project now is $5.6 million.

CUC received a $2.1-million grant from EPA, but over $450,000 of this amount has been used for the architectural and engineering design and other related fees. There remains $1.6 million from the EPA grant, leaving CUC with a $3.5 million budget shortfall for the project.