Westminster approves taking out $30 million in municipal bonds for new wastewater treatment plant

Westminster approves taking out $30 million in municipal bonds for new wastewater treatment plant
The Westminster Mayor and Council, from left, Councilmen Benjamin Yingling, Tony Chiavacci, Council President Dr. Robert Wack, Mayor Joe Dominick, Councilwoman Dr. Mona Becker and Councilman Gregory Pecoraro. (Alex Mann / Carroll County Times)

Westminster’s Mayor and Common Council approved an ordinance on Monday, Jan. 28, allowing the city to take out almost $30 million in state loans for its approximately $70 million wastewater treatment facility overhaul — which has been deemed the biggest project in city history.

“Fortunately, the state is going to pick up the tab for a pretty sizable chunk of that expenditure,” Councilman Tony Chiavacci said. “We have to come up with the rest, and the rest equals about $30 million.”


Financed by the Maryland Water Quality Financing Administration, the loans are up to approximately $27.6 million and $1.5 million.

They are administered separately because interest on the larger loan is tax-exempt and the smaller loan is taxable, a memorandum prepared by the city’s bond counsel explained.

“Why two loans?” said Lindsey Rader, Westminster bond counsel. “It’s actually in the city’s favor.”

The up to $1.5 million loan is more like a state grant, Rader explained, because if the city doesn’t default on the loan in the 10 years after closing it, the cost is forgiven.

Rader said she’s never heard of a default occurring throughout her more than 20 years doing principal forgiveness loans with the water quality financing administration.

As for the more than $27.6 million bond, the interest rate is far below market, with similar bonds from the financing administration going for about 0.09 percent interest.

“They’re much, much lower than what market rates are, that you or I or a company could borrow money for,” Chiavacci explained. “But there is a small interest on that. Most of it is going to be almost interest free.”

A revamping of the city’s wastewater treatment facility, which serves city residents and some 15,000 neighboring Carroll County citizens, has been in the works for more than a decade, with stricter nitrogen and phosphorus emission targets resulting from the second Chesapeake Bay Agreement in 2000.

The agreement, which built upon nutrient reduction initiatives achieved under the inaugural 1983 agreement, strives for better water quality.

Liquid discharge from wastewater treatment plants, and agricultural and urban stormwater runoff are the three most prominent contributors of nutrients to the bay. Nutrient pollution feeds dangerous algae blooms in the bay, which consume oxygen that other marine life need to survive.

The new treatment facility must meet updated Maryland Department of the Environment markers. Previously, MDE allowed a total nitrogen limit of 8 milligrams per liter on yearly average and total phosphorus limit of 2 milligrams per liter on monthly average. Those targets were slashed to 3 and 0.3 milligrams per liter, respectively.