News Ticker

Construction Starts on Payson $34M Blue Ridge Pipeline

By Pete Aleshire for the Payson Roundup

Original Headline: Payson Shuffles Pipeline Loans

C.C.Cragin Reservoir (also known as the Blue Ridge Reservoir). Photo Credit: Andy Towle

Construction crews are ready to deploy bulldozers, trenchers and subcontractors to start work on the in-town connections for the $34 million Blue Ridge water system overhaul project that will double the town’s long-term water supply.

Initial work will focus on upgrading pipelines and connections in Rumsey Park and along several miles-long sections of water main in town. Semi-trucks in the next few weeks will start hauling some 15 miles worth of big, 36-inch pipes contractors will eventually bury alongside Houston Mesa Road.

The town plans to finance the pipeline over a period of at least 30 years with loans from the federal Water Infrastructure Finance Authority (WIFA). The town has lined up ample financing, but WIFA administrators urged Payson to simplify its bookkeeping by returning the unused stimulus loan and covering the costs instead with a new, WIFA loan.

Two local contractors landed two of the three initial contracts to install new water lines and additional connections needed to accommodate the Blue Ridge water once it arrives in 2014.

The town still must award contracts for the major portion of the project, which consists of burying the pipeline alongside Houston Mesa Road and constructing three crossings of the East Verde River.

The Payson Town Council on Thursday voted to give back an unused $2 million federal economic stimulus loan to build the Blue Ridge pipeline — then immediately signed on for a new $6.2 million federal loan with the same low interest rate.

Town officials have spent months juggling federal grants and financing to dramatically reduce the cost of the project. Nearly four years ago, Payson got a $10.5 million federal stimulus package of grants and loans for the pipeline. That included a $4 million cash grant the town spent mostly on buying pipe and more than $6 million in low-cost federal loans.

The new $6.2 million federal loan at an effective rate of about 3.5 percent will cover construction costs through the remainder of the current fiscal year, which ends in July of 2013.

Read more at Payson Roundup