Treasury loan keeps project on course

By: Martha Garcia, Colfax Record Editor
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Contractors working on the $6.5 million City of Colfax Wastewater Treatment Plant upgrade and Pond No. 3 Liner project will get paid on time, following a float loan made to the city through the Placer County Treasury. According to Jenine Windeshausen, Placer County Treasurer/Tax Collector, the $3 million loan will keep the city from having a cash-flow problem while the city waits to get paid from the State Water Resources Control Board’s State Revolving Fund, which operates on a 30-to-60 day reimbursement basis. “If they go ahead and pay contractors and wait to get reimbursed it creates a difficult situation for the city. It leaves them with a really low cash balance for everything, like payroll,” Windeshausen said. The interest rate on the seven-month loan is .4 percent, Windeshausen said, and depending on when the city gets reimbursed by the State Revolving Fund, “they can prepay with no penalty at any time.” The note, approved by the city council on Aug. 22, comes due April 21, 2013, she said. According to Windeshausen, it is not uncommon for the County Treasury to make this type of loan to local governments. “From time to time when these situations arise, we’re there to help,” such as the loan made in Rocklin over a year ago when a school was under construction during the state budget turmoil, she said. Even though the school’s funding had been approved and the checks for reimbursement had been issued, they could not be mailed to the school district because funding was up in the air. Had the county Treasury not made the float loan, the school district would have had to not only stop construction but also pay a contractor to mothball the site to protect it from weather and vandalism. “We did the same thing,” Windeshausen said. The Treasury purchased the note and the Rocklin district “never skipped a beat – they went right on through with construction.” Colfax received a previous float loan in 2007-8, Kranz said, for building the original sewer plant, which cost $9 million. "That was all paid back, of course." Kranz said the city is “very appreciative of the county treasurer’s office in helping us out. What this allows us to do is pay invoices from Lorang Brothers, of Colfax, as they are received, as well as those from Campbell Construction of Reno that is doing the pond liner.”