The Bartlesville Municipal Authority and City Council voted Monday to submit an application to the Oklahoma Water Resources Board to finance the expansion of the City’s wastewater treatment plant.
While the funding won’t be accessed until construction starts in 2026, the application locks in financing rates for the sizable loan.
The $83.2 million loan includes contingencies “to ensure that we don’t shoot too low,” said Water Utilities Director Terry Lauritsen.
“We included some contingencies to help bolster that number up to ensure that we don’t shoot too low as far as potential financing for the planned improvements and upgrades,” Lauritsen said. “So if the cost of the improvements come back at, say, $60 million, that’s all we will draw.”
The purpose of acting so far in advance of needing the funds is to lock in interest rates at today’s rate, Lauritsen said.
“Primarily, we’re looking to get an application before the Oklahoma Water Resources Board to lock in our financing rates,” said Lauritsen. “If financing rates are lower at the time construction is ready to begin, we can de-obligate the loan with the Oklahoma Water Resources Board and then reapply to secure the lower rates. Applying for the loan now establishes a cap on these rates.”
The expansion, which is required by State regulatory agencies, will be the largest capital expense the City has ever undertaken.
“This project is driven by a consent order that we have with the Oklahoma Department of Environmental Quality, which requires us to complete these upgrades to our wastewater treatment plant,” said Lauritsen. “Within the order, we’ve agreed to start plant improvements by 2026. Completion of this project will increase the treatment capacity of the plant, which will then allow an upgrade to several pump stations within the wastewater system (anticipated to begin in 2030) to eliminate the remaining system restrictions to ensure all wastewater is conveyed to the plant, treated and discharged in accordance with our permit.”
The loan will be repaid through utility rates, Lauritsen said.
“We’ve been positioning ourselves for the last eight years (since 2016) with the capital investment fee to raise funds in anticipation of this project,” he said. “It’s possible those fees may require some adjustment once the final cost of the improvements is known, but we believe we’re in a good position based on the actions we’ve taken in anticipation of this project.”