Sanitation Engineer Chris Brausch talks with Warren County commissioners about a $10 million sewer plant project. The commissioners held up support for the financing plan on Tuesday. STAFF/LAWRENCE BUDD
Photo: Lawrence Budd
Photo: Lawrence Budd

$10M Warren County sewer plant project stalled over financing questions

The commissioners directed staff last week to explore whether the three communities could afford to cover their shares of the project.

“I think we need to be prudent,” Commissioner Dave Young said. “We have to do what’s in the county’s best interest.”

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A proposal by Warren County staff called for the county to pay for its share of the upgrades to the sewage treatment plant using $2.5 million in cash reserves. That would save the county an estimated $2 million in financing costs on the project.

The rest of the project would be financed by Franklin, Carlisle and Germantown, paid through the Warren County Port Authority. The plan called for the cost to the communities’ to be $2.5 million each in principal, plus about $6 million in interest for a 30-year loan, according to a presentation given to the county commissioners.

Last week Young and Commissioner Shannon Jones questioned the proposal during the initial presentation by county staff. It would leave the county with liability for the loan if any of the other governments ran into trouble paying off their shares, according to Bruce McGary, the assistant county prosecutor advising the commissioners.

“It’s a pretty big investment we’re making, then assuming the liability,” Jones said.

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Instead Young suggested some or all of the three governments issue tax-free bonds raising cash to cover their shares and reducing the county liability.

“They can go issue a bond, then they can write a check,” Young said. “It’s just a thought.”

Staff questioned whether the communities would want to issue bonds and whether the arrangement was legal.

The regional plant is overseen by a board made up of members from the communities and is operated by Veolia North America, a private corporation. Warren County and the three communities each own 25 percent of the plant.

Sanitation Engineer Chris Brausch said the private, non-profit plant is unique. Brausch said this created problems obtaining conventional financing.

Brausch said improvements are overdue at the plant, which dates back to the 1960’s. He said the regional board is hoping to begin construction in January on the first of two phases of the project, designed to improve flow in and out of the plant.

“We’ll certainly get you answers,” he told the commissioners.

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After the meeting, Deputy County Administrator Martin Russell said staff was researching the questions raised by the commissioners and planned to bring it back to them on Tuesday for a decision.

Franklin officials could not be reached.

Carlisle Mayor Randy Winkler said he had not been briefed on the questions, and said he does not know if the village is in a financial position to issue the bonds.

“I’m not so sure we could,” Winkler said.