Gypsum expects stimulus funds answer
Gypsum, CO Colorado
GYPSUM, Colorado “-Gypsum, Colorado officials expect to find out Friday whether the town qualifies for about $1.3 million in federal loans for a pair of utility projects.
The money is part of President Barack Obama’s $787 billion economic stimulus plan.
Gypsum’s loans would cover two projects: Building a composting plant at the American Gypsum Company mine north of town, and constructing a hydro-electric power plant. A hydroelectric power plant converts water into electricity.
If the state ” which is administering the money ” agrees to lend Gypsum the $1.3 million, the town will benefit from zero-percent interest rates on the loans, town water attorney Ramsey Kropf said.
That appeals to Gypsum mayor Steve Carver.
“We can get the loan with no interest and we can get the projects done,” he said.
If Gypsum qualifies for the loans, there’s a chance the town won’t have to pay back some or all of the money, a state official said. Some of the projects that qualify for the loans will also qualify for up to $2 million worth of debt forgiveness.
“We’d be able to give a lot of benefit to the people in the coumunity without nearly as much expense,” Gypsum councilman Tom Edwards said.
However, a state chart suggests that Gypsum is not among the top contendors for the debt forgiveness.
Gypsum should find out whether it qualified for both the loan and the debt forgiveness on Friday.
If Gypsum qualifies for the loan, Carver said he wants to move forward with the projects regardless of whether the town also qualifies for debt forgiveness.
“We’ll still have to do the projects on down the road,” he said. “This just makes it more feasible to do it.”
Just because the town qualifies for the loan, that doesn’t mean it is required to sign up for the program. However, both Carver and Edwards said they are leaning toward taking out the loan if the town qualifies. Town manager Jeff Shroll said the earliest he expects council to make that decision would be at its June 23 meeting.
The bulk of the money ” about $937,000 ” would flow to replacing an aging water line at the town water treatment plant and installing a hydroelectric power plant at there. The water line in question transports drinking water from Moser spring to the town’s water treatment plant east of Gypsum Creek Road.
That water line is 40 years old and needs to be replaced because it’s too small, town public works director Jeff Shreeve said.
“As the town’s grown and we need more supply, it’s a bottleneck in the system,” he said. “It will help our system’s efficiency. It’s shallow and there’s the potential for it to ice up in the winter time.”
With the hydro electric facility addition, the water line could be used to convert water into electricity. Officials expect the hydroelectric plant to generate 65 kilowatts of electricity.
“We can offset our load of the (Gypsum recreation) center or possbily our wastewater treatment plant,” Shreeve said. “There’s enough electricity generated by the plant where we’re bascially taking one of those buildings off the grid.”
That plant is expected to save the town $38,000 in electricity costs each year, Kropf said. And that savings could offset all but about $11,000 of the roughly $46,800 the town would need to fork up each year to cover the debt service payments on the loans to build the water line and build the hydroelectric power plant.
Presently, the town buys its electricity from Holy Cross Energy.
The rest of the money, or roughly $376,000, would fund the composting plant. The composing plant would transform sludge ” a byproduct of sewage from the town sewer plant ” into compost.
Presently the town hauls its sludge 60 to 200 miles away from the sewer plant to outside composting sites, mostly near Leadville, Shroll said.
Armed with its own composting plant at the American Gypsum mine north of town, Gypsum would only need to haul its sludge five miles, which would save the town money on transportation costs, Shroll said.
The town did operate a composting facility at its sewer plant but it shut down several years ago because nearby residents were upset about the smell, Shroll said.
Shreeve said the smell won’t be a problem with the new composting plant because it is far enough away from residential neighborhoods.
The compost will be used to reclaim the mine land. The compost will be mixed with soils at the mine to help with growing trees, sage brush and native grasses.
Paying back the loans on building the composing plant would be about $18,800 per year.
So what are Gypsum’s chances of qualifying for these loans?
Up for grabs is $32 million in federal funds for drinking water projects and another $30 million for waste water projects, said Carolyn Schachterle, an official with the state health department. The state has received that money from the federal government through the American Recovery and Reinvestment Act of 2009.
So far, municipalities statewide have applied for $88 million worth of drinking water-related projects, Schachterle said.
Competition is even more steep for the wastewater projects. Some $182 million dollars of projects are vying for the $30 million, Schachterle said.
The state will give preference to projects that are environmentally friendly and shovel ready, Kropf said.
“It hinges on how the state picks the projects,” she said. “Is it shovel ready? Will it accomplish putting people to work right away?”
Schachterle confirmed that, and added that projects that clear up an accute health hazard or chronic longterm problem are given priority.
Not everything about the stimulus dollars appeals to Shroll.
First of all, he had expected the federal government to offer stimulus money in the form of grants ” not loans. And he said simply applying for the stimulus funds has already cost the town about $20,000 in engineering and consulting costs.
As Carver said, “It’s stimulating our attorneys.”
If the town does qualify for the loans, money to pay off the debt would come from the town’s water fund, which contains $2.5 million, Shroll said.
Edwards said he doesn’t have any particular concerns about taking out the loans.
“Both of those funds in the town are pretty well financed and there’s money available in there to take care of the projects,” he said. “I think the loans would be well covered by the service fees we charge.”
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