Statesboro City Council unanimously approved the two largest dollar-value items on its agenda Tuesday. Potentially the larger of those was an application for a $6.5 million grant to fill the "gap" in funding the Creek on the Blue Mile project.

The city staff at this point is only applying for that grant, after council members also gave their unanimous go-ahead the previous month to apply for a different grant for the same amount and purpose. So the outcome of those applications remains uncertain.

But the largest definite spending item approved Tuesday was the unrelated award of a $1.89 million construction contract for extending water and sewer service to an area on Fair Road, with the healthcare company Optim Orthopedic footing almost 20% of the bill.

‘Creek’ gap grants

The application for a special, federal Economic Development Administration, or EDA, grant for the Creek on the Blue Mile was one of several proposals city staff members set out during a 4 p.m. “work session” with Mayor Jonathan McCollar and only two council members present. But four members attended the 5:30 p.m. regular session, with only District 1 Councilman Phil Boyum absent, so votes were then possible.

“What we are looking to do is submit a grant application for the Creek on the Blue Mile project,” city Planning and Development Director Kathy Field said during the work session. “The application would reflect the funding gap for the project, which is $6.5 million.”

Proposed since 2018, the Creek on the Blue Mile is a flood control project, with economic development aims, for the Little Lotts Creek drainage that crosses under the “Blue Mile” of South Main Street and continues toward Gentilly Road.  Since 2019, $21 million in state money has been available for the project, including a $5.5 million grant and a $15.5 million low-interest line of credit, both awarded to Statesboro through the Georgia Environmental Finance Authority, or GEFA.

However, consulting engineers who did the feasibility study initially projected a total cost of $40.2 million to $64.8 million, later revised to a range of $44.63 million to $72.39 million. But after offering to help  the city find  ways  to  make the project affordable, consultants  from the Freese & Nichols firm in August proposed that removing the dam and 26 -acre reservoir from the current plan to reduce the cost to an estimated $27.6 million.

City officials have rounded that to $28 million, leaving a $6.5 million gap between the projected cost and the $21.5 million state funding and financing.

The specific grant program through the EDA was created under one of the COVID-19 pandemic-related federal stimulus packages. These grants are intended to assist communities with “long-term economic recovery strategies through a variety of non-construction and construction projects,” according to Field’s memo the mayor and council.

“The expected EDA grant awards are between $500,000 and $5 million; however, the actual award ceiling is $10 million,” Field said.

So the city will seek the whole $6.5 million by this route, she and City Manager Charles Penny  said.

No matching funds from the city would be required, and there is no deadline, but the  EDA  has advised local governments to submit their  applications by  March 31,  for  grants to be awarded later in 2022.

Last month, during the Aug. 17 meeting, the council by a 5-0 vote gave city staff go-ahead to apply for a separate State Fiscal Recovery Fund grant from the office of Georgia Gov. Brian Kemp. This fund was  also created with federal stimulus money, received by the state under  the American Rescue Plan Act. That grant does require a minimum 20%  match, but the city could cover that with the previously approved state funding.

No amount was set for that grant application when council gave the go-ahead, but the city staff applied for the full $6.5 million by that route also, Penny said.

The city could spend the full amounts, up to $13 million, on the project, if both grants were approved, he said. The city will have to repay whatever it uses from the GEFA  line of credit but  would not have to repay the grants.

“The more grants we can get like this, the better off we’re going to be,” Penny told the mayor and council members.  “So we’ll keep scouring for more grant opportunities to make that project.”

Optim water & sewer

During Tuesday’s regular meeting, the  council by a 4-0 vote awarded a $1,887,083 contract for McLendon Enterprises to extend city water and  sewer lines and install a sewer lift station to serve Optim Orthopedic and the surrounding area across Georgia Highway 67 from the Kiwanis  Ogeechee  Fairgrounds.

Representatives of Optim had asked Statesboro officials in 2019 to work with the company to bring city water and sewer service to the office and clinic location. In July 2020, Optim Orthopedic agreed to have its property annexed into the city and to pay $350,000 toward the cost of extending the utilities.

So the city will actually be responsible for about $1.5 million and the healthcare firm for $350,000 of the cost, Penny noted.

McLendon Enterprises, which is based in Vidalia, actually bid $2,110,876, but that was the lowest offer among the three companies that  bid, the others being  Y-Delta and Lakeshore Engineering. However, city staff negotiated with McLendon to lower the price to the almost $1.89 million final figure, which is still above  the originally budgeted  amount  but allows the city “to move the project forward,” Public Utilities Director Steve Hotchkiss stated in a memo.

The fiscal year 2021 budget included $1.1 million from the city’s water and sewer revenue for the project. The remaining $437,083 not paid by Optim will come from the water and sewer fund balance, Hotchkiss stated.

The project calls for about two-thirds of a mile of 12-inch diameter water main, two-thirds of a mile of 10-inch forced main and almost one-third of a mile of mostly eight-inch sewer main. Just the pumps for the sewer lift station are listed as a $452,759 item.