1. “Free” Stimulus Money Results in Higher Utility Costs for Residents of Perkins, OK
In Perkins, Oklahoma, residents are literally paying a price for accepting “free” stimulus dollars.
Perkins' wastewater treatment plant is outdated and the town had planned to build a new one for $5 million. To help with the cost, the town applied for, and received, $1.5 million in “free” stimulus money. “We were shovel ready. The engineering was done. We were ready or getting ready to advertise for bids,” said Perkins City Manager Pete Seikel. Then came the catch.
The Perkins Journal reported, “The good news: Perkins is receiving money from the American Recovery and Reinvestment Act for its new wastewater treatment plant. The bad news: ARRA funds come with strings that will increase project costs by 25 percent.”
As a condition of accepting those funds, the town must comply with a number of federal requirements.
These federal restrictions have increased the total cost of the project from $5.26 million to $7.2 million, offsetting any financial benefit from the grant. Additionally, the state tied the federal dollars to the Oklahoma Water Resource Board’s (OWRB) revolving loan program in a 70 percent loan/30 percent grant arrangement. Perkins will be borrowing $5.875 million from OWRB and receiving $1.445 million from a federal stimulus grant.
As a result, utility rates for local residents have risen dramatically to pay the costs for accepting the federal assistance. To pay back the loan and the increased cost of the project, the town raised residents’ utility taxes by 60 percent this year.
The City Manager acknowledged that residents don’t understand why their sewer rates have to be increased if the city is getting federal grants to build the new wastewater treatment plant.
“I thought the stimulus money, I thought that was going to pay for it. I don't understand why we have to pay for it, too,” said Robert Allensworth of Perkins.
“It is to stimulate the economy, to (get) people back to work, inject some cash into the system,” said Seikel, but even he says, at best, getting the stimulus money for the new wastewater treatment plant will be a wash.
Perkins' wastewater treatment plant is outdated and the town had planned to build a new one for $5 million. To help with the cost, the town applied for, and received, $1.5 million in “free” stimulus money. “We were shovel ready. The engineering was done. We were ready or getting ready to advertise for bids,” said Perkins City Manager Pete Seikel. Then came the catch.
The Perkins Journal reported, “The good news: Perkins is receiving money from the American Recovery and Reinvestment Act for its new wastewater treatment plant. The bad news: ARRA funds come with strings that will increase project costs by 25 percent.”
As a condition of accepting those funds, the town must comply with a number of federal requirements.
These federal restrictions have increased the total cost of the project from $5.26 million to $7.2 million, offsetting any financial benefit from the grant. Additionally, the state tied the federal dollars to the Oklahoma Water Resource Board’s (OWRB) revolving loan program in a 70 percent loan/30 percent grant arrangement. Perkins will be borrowing $5.875 million from OWRB and receiving $1.445 million from a federal stimulus grant.
As a result, utility rates for local residents have risen dramatically to pay the costs for accepting the federal assistance. To pay back the loan and the increased cost of the project, the town raised residents’ utility taxes by 60 percent this year.
The City Manager acknowledged that residents don’t understand why their sewer rates have to be increased if the city is getting federal grants to build the new wastewater treatment plant.
“I thought the stimulus money, I thought that was going to pay for it. I don't understand why we have to pay for it, too,” said Robert Allensworth of Perkins.
“It is to stimulate the economy, to (get) people back to work, inject some cash into the system,” said Seikel, but even he says, at best, getting the stimulus money for the new wastewater treatment plant will be a wash.
