Board of County Commissioners action completes plan for $53 million in savings on the county’s largest ever capital project
The final of three portions of a loan from the State of Kansas approved today by the Johnson County Board of County Commissioners completes work that will save ratepayers $53 million.
Today’s action by the Board authorized the execution of a $76.7 million loan for improvements to the Nelson Wastewater Treatment Facility. The funds will be used for ongoing reconstruction of the Nelson Facility, built in late 1940s and now at the end of its useful life. The project is expected to be completed in 2029.
The total loan of $276.7 million, approved in three portions, comes from the Kansas Department of Health and Environment’s Kansas Water Pollution Control State Revolving Fund Loan. This program offers an interest rate well below what would have been offered through general obligation bonds. In this third portion of the loan, the interest rate will be 2.91%, compared to nearly 4.1% with traditional financing.
That loan is just one of the ways that Johnson County staff has saved money on the project. Johnson County Wastewater also obtained a Water Infrastructure Financing and Innovation Act loan in the amount of $281.26 million through a competitive application process. The interest rate for the WIFIA loan is 3.01%, saving an estimated $80 million over traditional general obligation bond financing. In another effort, the Nelson Improvements Project team came up with several ways to control costs, and the reductions created approximately $61 million in savings. That’s nearly 10% of the final authorized project cost of $609,984,000.
County Manager Penny Postoak Ferguson said she appreciates the staff’s innovation, expertise and hard work to save a significant amount of money for Johnson County Wastewater ratepayers.
“The county’s project team deserves much of the credit for using strategy and creativity to identify non-traditional revenue sources and cost-savings, for the benefit of our ratepayers,” said Postoak Ferguson. “Our AAA bond rating, which is a testament to the financial stewardship of the entire organization, also plays an important role in helping us secure these kinds of competitive interest rates.”
The Nelson Facility is the oldest in the Johnson County Wastewater service area, and it is currently undergoing renovations as part of Johnson County Wastewater’s 25-year Integrated Plan. The project is expected to be completed in 2029. The facility serves two main tributary basins in northeast Johnson County – containing all or part of the cities of Fairway, Merriam, Mission, Overland Park, Prairie Village, Roeland Park and Shawnee.