Mebane’s city council has approved financing for a new city elevated water tank that is to be built off South Third Street across from the ABC store and near the Fresenius dialysis center.
The city bought the land earlier this year, with the water tank project in mind, but had not moved forward with the the project until earlier this month.
The total cost for a second water tank – the city already has one tank, with a 300,000 gallon capacity, on South Eleventh Street. The new tank will have more than three times the existing capacity, based on city specifications thus far, with a 1 million gallon capacity.
The city has solicited construction bids for the project which are due to be received and opened on Monday, August 28.
The estimated cost of the new water tank is $7.025 million. The city anticipates a grant of about $2.653 million that will reduce the overall out-of-pocket cost of the project to $4.372 million.
Meanwhile, the city council has agreed to one of the three financing options received, one from Capital One Public Financing, LLC, which proposed to offer bonds at a 4.46% interest rate for 20 years. The city has also set in motion seeking approval from the Local Government Commission in Raleigh, which must approve municipal bond financing.
The Capital One proposal had the lowest 20-year rate and will allow up to $1 million in prepayments to be made annually for the first 10 years, after which there is no prepayment limit.
The 20-year financing plan estimates an annual payment of about $350,000 annually, with a total repayment of almost $7 million.
Council members voted to proceed with the financing plan and the request to the Local Government Commission on a unanimous 5-0 vote.