Manhattan's sewage woes
Manhattan Mayor Tony Haag is shown during a tour of the town’s new mechanical sewage treatment plant in this May 2008 photo.

The town of Manhattan will receive a loan of at least $1 million loan at 3 percent interest to refinance debt it incurred for its mechanical wastewater treatment facility, a Montana Department of Natural Resources and Conservation official said Monday.

Town officials have been working with the state to both reduce the interest rate and extend the life of the $4.6 million, 20-year loan.

The town has several state loans at 4 percent and another loan at 3.75 percent interest, said Anna Miller of the DNRC resource development bureau. The town can take advantage of a Severance Tax loan program to refinance the 4 percent loans and a portion of the 3.75 percent loan, she said.

The program was authorized by the 2009 Legislature and Miller said the agency has to comb through the books to see how much money is available to Manhattan.

“I’m trying to find out who needs what and what projects are moving forward,” she said. “Right now, it looks like we can refinance at least $1 million of their debt, which would take out the 4 percent loans and part of the 3.75 percent loan to get that down.”

The agency may be able to allocate more money, but until won’t know until officials look into two other applicants, Miller said.

“I’m going through and working with some of the other folks that are a little ahead in the line to see if we can do a little more than the $1 million,” she said. “But that should bring the town’s payments down to help them with their users. I don’t know if it’s going to lessen any user rates in place right now, but it should help them not have to raise them as much.”

The Manhattan Town Council has put off a previously approved $84 sewer rate hike until the state weighed in on refinancing options. With the Legislature in session, Miller said the agency has been hopping, but an offer should be ready in at least three months.

No matter how the situation works out, Mayor Tony Haag said any debt relief will be welcomed.

“A million bucks at three percent is better than a million bucks at 4 percent or 3.75 percent; anything helps,” he said. “We’re working at doing the best we can.”

For the most part, the state has not had to offer similar relief to other communities, Miller said.

“Manhattan has a such a huge debt, we wanted to see how we could them,” she said. “It’s a program we hadn’t thought about originally, but now that we have some other people who aren’t using their authority, we can say we have something to help.

“It doesn’t help with everything, but it sure makes life better,” she added.