Albany City Council, during a one-item special call meeting last Friday morning, February 19, made somewhat of an unexpected decision when it basically put a halt to a major $1.9 million waterline extension project. That project would have seen a line run from around the Perry Hay farm north on the 127 Bypass to the junction of Hwy. 738 to the south.

Five of six members were on hand for the brief meeting with councilman Leland Hicks being absent.

The meeting was held for the purpose of either approving or rejecting a USDA-Rural Utilities Service (RUS) Letter of Intent to begin the process of funding the project with a combined grant and low-interest loan.

Representatives from Monarch Engineers, who had worked for the past year putting together a funding package with USDA on the project, was on hand to present the letter and other information as well as answer council member questions.

When the documents were presented to council, city legal advisor Norb Sohm said there had been discussion as to whether or not there was a need for the project.

David Bowles, engineer, said it was an opportunity to get water to the bypass, with the primary positive to promote growth and development with potential business along the bypass route.

In the USDA’s Letter of Intent to Meet Conditions, which would be considered approved when signed, also included a “Request of Obligation of Funds.”

The terms of the funding package included a grant not to exceed $578,000 and a 40 year low-interest loan, not to exceed $1,351,000. The terms would also call for a rate increase to water customers–once the project had been completed in about a year and-a-half, of just under $1 for both city and county users to pay off the loan debt.

Bowles said, “This is an opportunity to get water on the bypass,” adding, “it’s the best deal you’re gonna get.”

When the issue was discussed, Councilman Tony Delk, in referring to the city’s recent audit report given earlier this month, that the water department currently owes the general fund some $900,000. He also said there are issues with the water plant and meters. “I am for the water line (extension), he said, but questioned raising rates before those issues are resolved can’t be justified.

Bowles said that 10 percent of the total project funds, or about $150,000, would be used as contingency funds and could be used for such things as added water meters or other related necessities.

Delk continued, saying, “we should have money in the water department.” He said it was a double-edged sword, noting the city needed new business along the bypass but questioned why the city, hypothetically, is pumping a million gallon a day and only getting paid for 700,000. “We have problems,” he added.

A question was also asked that if a major industry that was a high-level water user located here, would the plant have enough capacity to handle it. Bowles assured the council it could, or possibly get incentives to expand the capability if necessary in such a case.

The engineer also recommended the council consider a committee, as some other cities do, made up of council members to work on side issues related to the water department, such as water meters, and studying where water may be being wasted, and so forth.

The only other council member to speak on the issue was Councilman Brad Thrasher, who echoed Delk’s sentiments, saying the water line extension should be put on the back burner for now and possibly looked at later.

Bowles warned, however, that if the grant and low-income loan offer was rejected, the city would likely not have much of a chance to get a project funded for sometime, especially at the low rates currently offered.

Following the discussion, Mayor Nicky Smith asked for a motion to either approve or disapprove the Letter of Intent. Councilman (Brad) Thrasher made the motion to disapprove, with Delk giving the second and the vote passed unanimously.

Bowles told the council that he would notify the USDA-RUS of their decision to reject the funding proposal.

The next regular meeting of Albany City Council is scheduled for next Tuesday, March 1 at 5 p.m. at city hall and is open to the public.