Rehoboth to seek USDA loan for City Hall
Rehoboth Beach officials plan to apply for an $18 million loan from the U.S. Department of Agriculture to pay for the proposed City Hall project.
Mayor Sam Cooper said the city is seeking a 25-year loan with a 3.5 percent interest rate, possible if the loan is approved by Tuesday, June 30. Cooper said the city’s annual payment would be $1 million for a 25-year loan; he said the city could seek a 30-year loan with an annual repayment of $978,000 but would have five additional years of payments.
The city commissioners will hold a public hearing at 7 p.m., Friday, May 15, on the City Hall and ocean outfall projects prior to a public referendum to borrow the combined $71 million for both projects. The referendum is expected to be held in June.
The proposed project calls for demolishing the City Hall building and convention center lobby and constructing a new building that will accommodate all city government functions: police, administration, building and licensing, Alderman’s Court and commissioners’ room. The convention center lobby will be revamped with new bathrooms and a larger space. Rehoboth Beach Main Street and the parking department will also get a new building on the same site as their current facilities.
Cooper said the City Hall project could be completed by Fall 2017.
Outfall costs
Cooper estimated the ocean outfall project would come in at $52 million: $25 million for the outfall, $15 million in plant upgrades and $12 million for new biosolids treatment facility. City engineers GHD recently estimated the outfall cost at $31 million and plant upgrades at $8 million.
The city has already been approved for a $10 million, 20-year loan by the state Water Infrastructure Advisory Council for the plant upgrades and a $25 million, 25-year loan for the outfall. Cooper said the city plans to apply for a loan for the biosolids treatment facility in August.
He said the yearly operation and maintenance of the system would be $1.8 million, with the county picking up 40 percent of the cost because Rehoboth treats wastewater from Dewey Beach, North Shores and Henlopen Acres. Cooper said the county reimburses the city every quarter for its share of the treatment plant operations. The city’s annual loan repayment on the project would be $1.5 million, Cooper said.
The average user rates would be $760 per year with the addition of the biosolids facility, an increase of 133 percent from the $325 average rate users paid seven years ago. The city has gradually increased sewer rates since 2009 to ease customers into the new rates once the outfall is operational.
