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Sewer loan likely will cost more

Crystal River appears to have run out of time in a last-minute dash for a low-interest federal loan that a consultant says would have saved taxpayers about $200,000 a year. The $6-million loan would have paid for a much-needed expansion of the city sewer plant. Without the loan, the city still can carry out the project but will pay a higher interest rate on the borrowed money.

A late start in the application process is among the difficulties that have all but doomed the city's chances for the low-interest loan.

On Monday, a state loan official said September is the earliest the city would receive tentative approval for the loan. State environmental regulators want the city to begin expanding the overburdened plant long before that.

If the city awards a bid for the project before getting tentative approval for the loan, it loses eligibility for the low-interest funds.

The 750,000-gallon-a-day sewer plant has been operating near capacity or over it for several months. Partly treated sewage has spilled from the plant into a neighboring wetland several times in recent weeks.

Under an agreement being negotiated with the state Department of Environmental Regulation (DER), the city would begin construction as soon as it obtains DER permits for the project. One permit may be issued within days, and all permits should be out before September, said David MacColeman of DER's enforcement division.

The DER also administers the federal loan program in Florida. The city got a late start on the loan because in early 1990 the City Council decided not to apply for the loan after consultant Henigar & Ray Engineering Associates told the city there wasn't enough time.

Last fall, the council changed its mind about pursuing the loan after a new grant consultant, Pro-design Engineering Inc., reported that the city had a chance for the money.

Monday, DER loan official Jim Plexico said that Pro-design's application was a long shot from the beginning because of the tight timing.

State officials worked with Pro-design to speed the process in hope of giving tentative approval for the loan by July 1, Plexico said.

Last month the City Council fired Pro-design because the consultant said it could not do the work on the loan and other city financing jobs for the consultant's original budgeted amount. That left unanswered several of DER's questions about the application, Plexico said.