ANDERSON — The city of Anderson will receive a $45.1 million loan for upgrades to its water system.
The money will come from the State Revolving Loan Fund.
Anderson Mayor Thomas Broderick Jr. recently made the announcement of the loan, which will be used for low-interest financing for the proposed $130 million project.
Included is a $12.5 million forgivable grant that will not have to be repaid, provided the funds are used for water system improvements.
The forgivable grant money will be divided three ways: $5 million to replace lead water lines, $5 million for the overall project in south Anderson and $2.5 million for engineering and design costs for the new proposed water treatment plant in south Anderson. The new plant would replace the Wheeler water plant, parts of which are 70 years old, according to Broderick.
“This is a major win for the city and our water utility customers,” he said. “This is an extremely competitive process, and our entire team is to be commended for putting together a compelling application for these needed funds that will allow us to save our rate-payers money while allowing us to make our planned major improvements.”
A $5 million portion of the loan will require no interest payments, while $27.6 million of the loan will be at interest rates below market rates.
“The Indiana Finance Authority’s decision to grant us these new forgivable grants and favorable loans is an indication that they agree with our assessment that these projects are absolutely essential for Anderson,” Broderick said.
Earlier this year, the Anderson Board of Public Works approved a $6 million contract with Patterson Horth, an Indianapolis-based construction contractor, to expand the city’s Lafayette water treatment plant capacity from 10 million gallons to 14 million gallons daily.
The expansion of the plant is expected to be completed in a year.
The city plans to issue $130 million in bonds over the next three years to upgrade the water system.
City Council has approved $9 million in American Rescue Plan funds, and the Anderson Redevelopment Commission is providing $19 million toward the project.
All the work is scheduled to be completed by September 2029, with the initial phase starting this year.
Included in the first bond is the beginning of a process to replace lead service lines in several neighborhoods and scattered sites. It also includes the development of two new wells north of the city that will involve a new line to the Lafayette treatment plant and a new transmission line from Cross Street to the water tank on Eighth Street.
City Council has approved a rate increase for the water department. The increase is pending approval by the Indiana Utility Regulatory Commission.
The last water rate increase was approved by the state in 2015.
If approved, the monthly rate for an average residential customer is expected to increase from $23.51 to $55.25 starting in 2029.
Large customers of the water utility would see an increase, as well. For example, those currently paying an average of $117,772 monthly would see their bills increase to an average of $434,171 starting in 2029.
A second bond, to be issued in 2026, will be used to open a new well field and treatment plant in south Anderson and close the Wheeler treatment plant.
The final bond issue in 2027 will be used to replace lead pipes in the remaining areas of Anderson.
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