Othello seeks federal funds to redrill well

OTHELLO — The Othello City Council spent nearly all of its regular Monday meeting talking about water.

The council approved a resolution to apply for a $1.8 million loan from the USDA’s rural development fund to re-drill Well No. 3 as well as replace and move the pumping equipment.

“Financing for Well No. 3 replacement, we need to make some arrangement to handle the cash flow,” said Jesse Cowger, president of Varela & Associates, the city’s engineering firm.

“Outside financing is necessary to make sure the water fund doesn’t need to borrow internally,” Cowger said.

Othello could get better terms on a USDA rural development loan than it could borrowing from other city funds — such as the sewer fund — Cowger said.

“The interest rate on a rural development loan is 2.5 percent, which is low, and far better than internal borrowing, and better than market rates,” Cowger told the city council.

An interfund loan — a loan one from one city fund to another — would have to be paid off in three years and likely at 3 percent interest, according to City Finance Officer Spencer Williams.

Williams said if the city borrowed from its water fund, it would need to pay back a little more than $600,000 per year for three years.

“I don’t think the water fund could pay that back,” Williams said. “It doesn’t have the cash flow.”

Cowger said the city could always pay the USDA loan off faster then the 10 year term if it chose. However, he noted that the city needed the loan for the well because it had other projects it needed to fund internally, such as non-potable water system it is looking at building.

“It’s not that you couldn’t (make an interfund loan), but I didn’t want to tie up city resources,” Cowger said.

The hope is to have Well No. 3 redrilled — it is currently crooked, and that burns out pumps quickly — by the beginning of summer, when water demand in the city will be high.

The council also approved $108,000 for an engineering study to begin work on the town’s new non-potable water utility, which will provide treated water to new housing developments for outside use, such as watering lawns.

The city needs to spend its own money on creating the non-potable water system because there’s little outside funding currently available.

“There’s a lot of state funding for drinking water, but few municipalities want to set up non-potable water systems,” Cowger said.

The city currently plans to provide treated water to all new housing developments on the south side of Othello.

“I’ve been pushing for this,” said Council Member John Lallas. “Two take groundwater from 1,200 feet down, treat it, and then water your lawn with it, that makes no sense.”

Finally, Mayor Shawn Logan announced that with the passage of the state’s capital budget, Othello will be receiving a $2.55 million grant to help pay for a $5.5 million project to drill a tenth city well, build a new water tower, and expand and improve city water lines.

Othello will also $500,000 to study pumping treated water back into the acquirer for storage.

“We’ve been working diligently on our water plan in the last two years, going to Olympia to meet legislators, the governor, his staff, talking about our water plan,” Logan said.

With a projected population of 15,000 in 2030 — almost double the number of residents today — Othello desperately needs to secure sustainable water for residents, farmers and industry, Logan said. It isn’t wise for the city to be 100 percent dependent on ground water while the water table is sinking.

“I’m thankful for legislators and lobbyists; it takes time and effort,” Logan said. “They’ve heard our story and they are very supportive.”