The Logan City Council review an agreement to sell municipal bonds to pay for a secondary water source should the primary source, the Guyandotte River, become unusable.
Robert Fields | WVOW News
LOGAN The City of Logan signed a bond agreement this week to secure funding for a proposed secondary water source project.
City of Logan officials said Tuesday afternoon that they’ve met with the U.S. Department of Agriculture’s Rural Development agency; that agency provides loans and grants, as well as technical assistance to companies and municipalities to promote economic growth in rural parts of the United States.
The total cost of that project, according to city officials, is estimated at around twelve million dollars. Attorney Paul Ellis, special counsel for the Logan City Council, said USDA Rural Development is working to facilitate grant funding amounting to a third of that cost, or four million dollars. Under West Virginia law, according to Ellis, cities are excluded from directly taking out loans. However, municipalities are allowed to issue municipal bonds to help fund infrastructure and economic development projects. In order to secure the grant funding, the USDA is going to require the City of Logan to utilize bonds in order to collect the other eight million dollars needed for the project. However, Ellis says it’s a long process.
“It requires us to issue bonds in order to get the grant. The USDA has given us paperwork that is essentially the paperwork they need to move forward with their ability to obtain the grant funding for us,” he told council members. “What we need to do is plug in bond counsel to take a look at this, work with Jeff [Vallet, the city book keeper] and do the bond process, which requires an ordinance, public hearing, notice in the papers, three meetings – it’s a minimum of three meetings to get bonds passed.”
Logan Mayor Serafino Nolletti signed that bond agreement Tuesday.
Municipal bonds are issued by local governments after being approved by voters. When an investor buys a municipal bond, it works like a loan to that local government, with interest being paid to the investor until the time of the bond’s maturity date when they see their return.
Discussions regarding a secondary water source for the City of Logan have been underway since early this year. The plan involves tapping into the natural ground water in the mountains to provide the city with a backup in the event that its primary source, the Guyandotte River, would become unusable or contaminated.
The city at this point has already invested two hundred thousand dollars into getting the secondary water source project launched. If approved, construction is expected to take between five and six years.
PHOTO | RJF
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