Alva Review-Courier -

Kiowa is closer to getting their dilapidated waterlines replaced from the wells at Sharon and upgrading the entire near 100-year-old system in town. The council voted to proceed with Phase I and Phase II of the estimated $8.2 million project. That's despite the fact the city did not receive either of the $600,000 CDBG grants (which was about 7 percent of the project) they hoped for when the project talks began. However, USDA loan and grant funding is “locked in.”

On Feb. 25 the council held a special meeting to hear a status update on the water improvement project. The agenda also included discussion on the possibility of adding a third police officer at the request of Police Chief Nate Houston. The other agenda item was an update on the city building renovation. This article focuses only on the water project.

Mayor Bill Watson opened the meeting with the flag salute and Councilmember R.L. Simpson saying a prayer. All other councilmembers were present including: Russ Molz, Brian Hill, Tom Wells and Brent Shaffer. City Attorney Brandon Ritcha also sat at the table with City Administrator Lou Leone and City Clerk Trish Brewer.

BG Consultants Inc. is the firm hired by the city to do this project. BG engineer Sam Johnson attended and approached the council to update them on the project. He confirmed the City of Kiowa did not receive either of the Community Development Block Grants (CDBG), $600,000 each, they had hoped for in the beginning. The city has known for a over year that the first CDBG would not happen. As reported recently the city was denied the second CDBG grant although they narrowly met the 51 percent requirement of the Low to Moderate Income Survey. The city needed 84 total points to get the grant and received only 71. Part of the reason for denial was reportedly a grant writer (for BG) error.

Phase I is replacement of approximately 10 miles of waterline from Kiowa's water wells south of Sharon to Hazelton along Tri-City Road. Phase II focuses on replacement of the remaining pipes in the city limits. The engineers and locals who looked earlier at the estimated 100 year old water system say there is a variety of PCB pipe, cast iron, galvanized pipe, cement asbestos, etc., that needs replaced.

At a previous meeting Johnson provided information that says Phase I total cost is $4,642,100. That is a $3,059,000 USDA Loan; and a $1,573,000 USDA Grant (about 34 percent of the project). Leone said that near 1.6 million debt forgiveness is IF Kiowa meets all the criteria such as holding public meetings; has the funding mechanisms in place; and the city takes care of the line.

For Phase II the total cost is $3,575,690. Of that total about 44 percent is a USDA grant. The two phases together will cost an estimated $8.2 million. Chelsea Morris, a loan specialist in rural development with the USDA who attended the meeting, told the council that the USDA money is locked in place for Kiowa.

Of that total $3.6 million for Phase II, Morris said $1,439,000 is a loan through the USDA . She said the USDA loans are on a 40-year plan with no pre-payment penalty. Morris said the interest rate on the loan is guaranteed at no higher than 3.125 percent.

Increased Water Rates and Payments

Leone said the city has already spent $124,000 toward this water project that they can't get back whether or not council voted to proceed.

Leone reiterated this project will be paid in part by users. It is not a tax-based, but a user-based expense. Kiowa now has 646 residential users. Currently, Kiowa residents are currently charged $17 for up to 2000 gallons of water/month. Leone said that cost for residents will increase to “around $21.” It cost an additional $6/month for every 1000 gallon of water used.

For customers using 5000 gallons per month, the administrator said the cost is now $34 or $35. That cost will increase to $48 per month. With the CDBG grant, the water rate would have been $48. Without the CDBG the water rate jumps to $52. Leone said, “We plan to cut costs to keep the rate at $48.”Johnson mentioned some possible cost reductions when addressing council.

Shaffer asked when a water rate hike will go into effect. Leone said beginning in 2020 the city will start a gradual rate increase.

The City of Kiowa's loan payment to the USDA will be $198,000/year, starting in June 2022, Leone confirmed. He said the city will make this payment to the USDA from revenue generated in the city's water department.

Council members agreed the city needs to move forward with this project. Molz said, “If we keep waiting, everything is getting more expensive.”

The council voted to authorize BG Consultants Inc. to proceed and continue with Phase I and II of this water project