By Allison Peck
OGALLALA, Neb. — Ogallala is working to finalize a roughly $7.5 million loan agreement for a major wastewater treatment plant upgrade, with city officials hoping to secure favorable financing terms before an October 15 deadline.
The Ogallala City Council considered the loan agreement with the Nebraska Department of Water, Energy and Environment during its regular meeting Tuesday, October 13. City Manager Tell Jensen discussed the project Wednesday morning, explaining the financing, potential loan forgiveness and why the city is working to complete the agreement quickly.
The project has been in development for several years, and Jensen described the treatment plant upgrade as a significant investment in the city's infrastructure.
“It's a big, big upgrade we've been trying to work on for a very long time,” Jensen said.
The approximately $7.5 million loan is intended to help finance the wastewater project. Jensen said the city was working to complete the agreement before the deadline to preserve a favorable interest rate.
“One of the concerns came up is they're wanting us to get this agreement done and signed and ready with them before I think it was October 15th,” Jensen said. “So we're really kind of cutting it close, but we want to make sure we got it before the loan rate went up.”
Jensen said the interest rate could increase to approximately 1.7% if the city missed the deadline. While that may appear to be a small difference, he said the impact becomes more significant when applied to a loan of this size.
“Now that might not sound like a lot, but out of 7.5 million, it ends up being a lot,” Jensen said.
The financing package also includes potential loan forgiveness through state and federal assistance. Jensen estimated approximately $1.3 million in forgiveness during the interview, which would reduce the amount the city ultimately needs to repay. The final amount should be confirmed against the executed agreement.
Jensen acknowledged that residents may question both the cost of the project and the amount of time it has taken to reach this stage.
“I can understand a concern in which people are looking at this agreement saying, wow, it's a big number,” Jensen said.
He also addressed broader concerns about the pace of government projects, explaining that public accountability is one reason the process can take longer than residents might expect.
“One of the concerns is being accountable to the citizens, being able to answer to the citizens,” Jensen said. He added that government procedures are designed to prevent decisions from moving forward without appropriate oversight.
The city manager said the wastewater project is not expected to cause an additional change to utility rates at this time. Ogallala's budget and fee schedule for the current fiscal year were established in September.
“No, there shouldn't be any effect right now,” Jensen said when asked whether residents should expect an impact on wastewater bills because of the project.
The loan agreement was listed on the October 13 council agenda under Ordinance 1454 for wastewater project C318074. The project's final financing terms and the council's formal action on the agreement should be confirmed with city officials.
Residents can find City Council meeting information and additional updates through the City of Ogallala.