Tekoa water rates reflect impact of loan obligation

Residents of Tekoa are now feeling the direct effect of the USDA Rural Development loan and grant taken out by the town last fall for upgrading the water system.

Tekoa water rates increased $5 at the end of December. The base rate of $38.50 paid by most citizens is now $43.50 each month. There are 365 active water connections charged each month in Tekoa which has a population of 820.

The aim of the project is to replace most of the aging lines in the city’s water system.

City Clerk Kynda Browning said surveyors from Century West, the engineering company for the project, have been surveying over the past month.

“They have to come when there is no snow. It’s kind of been hit and miss there. They’ll work on it as they can,” Browning said.

The project involves a $2,736,000 loan and a $1,368,000 grant from the rural development program.

Mayor John Jaeger explained the loan will be paid back over 40 years. Interest rate for the loan will be 3.375 percent, Browning said.

In January 2012, water rates will rise another $5 and in 2013 they will rise another $7, bringing the minimum water bill to $55.50 for all water units in the town.

The total raise will be $17 by 2013.

By 2013, the town expects to bring in approximately $263,000 per year from water bill payments.

Jaeger said roughly half the money from water rates by 2013 will go toward the water pipe construction loan with annual payments of about $127,165.

Browning noted the city undertakes the current loan application after paying off a prior loan with $140,000 which had accumulated in reserve funds for that project.