SANFORD, N.C. — A $48 million expansion project nearly doubling the capacity of Sanford's wastewater treatment plant is under way.
Bonds have been issued for the Big Buffalo Wastewater Treatment Plant plan, which will boost capacity from the current 6.8 to 12 million gallons daily by 2014, the anticipated completion date.
Simply getting the project underway was good news for city officials, who have been working on expansion plans for several years. But the news got even better last month, when construction bids came in $12 million under the projected $60 million price tag.
City Manager Hal Hegwer said the final amount of the project, including the cost of financing, will be eased by federal assistance through the America Recovery and Reinvestment Act of 2009, more commonly known as the Stimulus Bill, and a state-administered revolving loan program which receives federal funding and caps interest cost at 2.22 percent.
Under the programs, Hegwer says, the city will end up saving about $14.7 million over the cost of issuing tax-free bonds, the traditional funding option.
The city also received a boost from strong credit ratings received for its initial revenue bond option from Moody's Investors Service, which gave the bonds an Aa3 rating, and Fitch Ratings, which posted a AA- rating using a different scale.
Closing on the bond sale will take place on Dec. 22.
"It's not a glamorous project, but it's a very important one for the city," said Sanford Mayor Cornelia Olive. "We're already blessed by having an abundant source of water, so the ability to process more wastewater means we'll be ready to handle growth for many years to come."
City engineers expect the construction project to begin early next year. When it's finished, Sanford will have the capacity it needs to grow through the year 2036.
Being able to accommodate growth is important, Olive said, because the broader Research Triangle region, which includes Sanford, has been growing as residents migrate from other locales into the Southeast.
It may be even more critical for Sanford because of its active manufacturing base led by internationally-known companies including Pfizer, Caterpillar, Tyson, 3M, Coty, Moen and Static Control.
Many industrial processes, especially in pharmaceuticals, require a lot of water. Having an ample supply of water and the capacity to treat waste makes the area even more attractive for companies looking for a place to do business.
Melissa Cardinali, financial services director for the City of Sanford, said both of the bond ratings are given only to high-quality, low-risk investments. "They make the bonds more attractive to investors and will allow the city to save more than $1 million over what the total debt service would have been with the next lower rating," she said.
The revenue bonds were sold by a group of underwriters including Wells Fargo Securities, the lead underwriter; BB&T Capital Markets and Morgan Keegan and Co.
"It was a good time to be in the market for projects like this," said Hegwer. "With the economy down, construction companies were looking for large projects to provide some stability for their business and there were some very good financing options.
"We had to act quickly to take advantage of the opportunities out there, because the stimulus funding was available only until the end of this year. But thanks to the city council and city staff working together, we were able to save the city millions of dollars."
About the City of Sanford
Located in the world-renowned Research Triangle Region, the City of Sanford is the seat of Lee County and home to about 30,000 residents. Known for the Sanford Pottery Festival and Temple Theatre, the city also has received distinctions including being recognized as a "Playful City USA" community by KaBoom!, a national nonprofit dedicated to increasing play opportunities for children, and as one of America's top small cities in economic strength by POLICOM, an independent economic research firm.
Hal Hegwer, City Manager