The Water Benefit Area #1 is complete and well under budget, according to a press release from Riga Supervisor Robert Ottley. At the December 12 town board meeting, final payments to the contractors were made. “I am happy to report that the water project has come in under budget by $1,460,264,” Ottley stated in the press release.
There were also substantial savings to the Water Benefit Area residents, due to the lower than expected interest rate on the bond which was used for partial payment of the project. The $3.75 million bond, which was approved by a special vote of the residents in 2010, was expected to carry an interest rate of 6 percent for 34 years. Due to a continuing sluggish economy, the rates for the bonds were locked in early in 2012 for an effective rate of 4.5 percent for only 29 years. This has resulted in a savings of about $144 per year for an average home with a value of $149,000 in the Benefit Area.
“I was hopeful that this project could come in under budget, but I never expected the kind of savings that we have obtained. I think this is a result of having people involved in this project from the start who had a clear understanding of how the entire process needed to be put together. Our thanks go out to the folks on the steering committee; Chatfield Engineers; Special Council Marcia Havens; and contractors, Blue Heron, Pilon, Highlander, Morsch, Randsco, and Angelica Drilling,” Ottley said in the press release. “We also need to thank all of our residents who voted to authorize the use of the Landfill Reserves to offset project costs. I am happy to let our town residents know that the $1,460,264 that was authorized and not used will remain in the Landfill Reserve account.”
Construction on the project began in the spring of 2011 and by fall of that year, water service was available to all residents living in the Benefit Area. Since that time, contractors have been working to finish lines used for looping the system and for restoration work. All of that work is now complete and has been deemed acceptable by the engineering project managers.
Cost for the project and funding sources are outlined below:
Projected Actual Difference
Total Cost $9,000,000 $7,539,736 -$1,460,264
Landfill Revenue Authorized $5,250,000 $3,789,736 -$1,460,264
Residents Bonding $3,750,000 $3,750,000 0
Interest Rate on Bonding 6% 4.5% -1.5%
Years of Debt Service on Bond 34 29 -5
Average Debt Service Cost
per Residence $833.37/yr. $688.67/yr. -$144.70/yr.
