The interest rates and the length of the loans the village of Forestville has for improvements to the community's wastewater treatment system are about already as good as they can get, Village President Terry McNulty said Monday.
The Village Board approved about a $1.7-million grant and loan package from the Rural Development Program of the U.S. Agriculture Department to fund repairs to a sewer line on West Main Street and to construct an addition at the treatment plant aimed at primarily reducing the level of ammonia discharged into the Ahnapee River.
About 45 percent of the USDA funds were in the form of a grant, while the remainder is in the form of a 40-year loan at 3 percent interest.
The Wisconsin Department of Natural Resources licenses the treatment facility. The DNR required the ammonia reduction as a condition for renewal of the operating permit for the 2013-to-2018 period. High ammonia levels deplete oxygen in the river and Lake Michigan and could kill fish and other aquatic life, the DNR said.
The village also has five years remaining on an older loan from for the U.S. Clean Water Act fund that was used for upgrades to the treatment plant in the 1990s. It, too, has an interest rate of 3 percent.
McNulty received board permission last month to explore rewriting the debt to reduce interest costs.
At Monday's Village Board meeting, McNulty said two bond consultants told him the only way Forestville could reduce total interest would involve shortening the loan period to not more than 25 years.
That would require "substantially increasing revenue" from the $85,000 per year the village currently pays on the debt, McNulty said. The only way to increase revenue, he said, would be to increase sewer rates for the community's slightly more than 200 customers, an unacceptable alternative.
"The good news is the village has done a good job financing these projects," McNulty said.
Once the older loan is paid off in 2018, the board could look into rewriting the Rural Development loan, McNulty said.