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City explores financing opportunities for improvements for Donax plant

By Staff | Jun 22, 2016

The City Council voted to have Mayor Kevin Ruane work closely with staff regarding financing opportunities to implement improvements for the Donax Wasterwater Reclamation Facility at its June 7 meeting.

The Donax facility has three separate treatment trains – plant one, plant two and plant three – with plant two and three being more modern and carrying the primary burden of the treatment. The first plant, which is much older, does not produce an effluent quality.

Keith Williams, public works director for the City of Sanibel, said in 2015 they operated solely on plant two and three, due to plant one not being brought online. He said they averaged a maximum of 4.82 milligrams per liter of total nitrogen and 2.75 milligrams per liter of total phosphorus.

“Within the current fiscal budget that we are in right now in our capital for sewer, we have $1.8 million associated with nitrate reduction and $1.8 million associated with improvements to plant one,” Williams said. “Additionally we are fortunate enough to secure a fiscal year 17 grant from Florida DEP – one for $450,000 for nitrate reduction and $375,000 for plant one upgrades.”

A few scenarios were presented to the City Council during the meeting for improvements.

The baseline, Williams said would be a scenario in which they leave plant two and three the way they are operating right now, but opt to upgrade plant one to solely meet equal performance value of plants two and three.

“The baseline gets you effluent quality across the board,” he said. “You wouldn’t see any improvement in the overall operation of the plant, but we would have more opportunity to utilize plant one more often.”

The first alternative, Williams said will entail carrying out the same work as the baseline, which includes an upgrade to plant one, so it operates equally as the other two plants. The alternative would also add in the treatment train denitrification filters for all three plants to reduce nitrogen, as well as add phosphorus reduction.

Alternative two involves taking plant one offline and converting its infrastructure into flow equalization tanks and doing an overhaul to plants two and three where all treatment would occur solely in plants two and three.

The second alternative would provide a new plant facility, so the ongoing maintenance in terms of aging parts will go away.

“When you are looking at the alternatives, we are looking at about a 40 percent reduction in total nitrogen moving from alternative one to alternative two. That is a significant reduction in my opinion from a natural resources perspective,” Director of Natural Resources James Evans said. “When you look at the cost, we are looking at about a 25 percent cost increase from alternative one to alternative two. You have to look at the long term. This could be an investment down the road.”

Williams said the first alternative has a price tag of $6.5 million and the second alternative has a price tag of $8.5 million.

In terms of funding, bonds, term loans and state revolving funds were discussed.

“The bank financing world is certainly one that becomes much more aggressive from a funding point of view when you have shorter terms,” Mayor Kevin Ruane said. “I’ve certainly been in the finance business for some 25 years and I can assure you there is a lot of mechanisms out there when your term goes from zero to 10 years and from zero to five years. The rates certainly are a lot different.”

He said he would like to work closer with staff regarding financing alternatives, which was made into a motion by council members, passing unanimously.

Ruane said in his opinion he is certainly going to advocate for alternative two. The rest of the City Council agreed that alternative two would be the best route to go.

He said the difference between one and two is a 40 percent reduction, $2 million crossover long term and significant benefits and probably some long term savings as well.

“There are obviously some moving parts,” Ruane said. “One we have a state grant. Two we have the opportunity for other state grants as well. Three as we compound interest and compound cash in there. Four there might be some opportunity, as we did go through this facility with Captiva talking about nitrogen reduction. They were very much in favor of it, so obviously if we ever got to the point where we come in harmony there might be some opportunities to share overall costs associated with this entire sewer system that we have if we can ever align with a density point of view.”

Follow Meghan @IslanderMeghan on Twitter.