SHERIDAN — The Tongue River Valley Joint Powers Board will seek additional loan funding from the United States Department of Agriculture after bids for the board’s proposed natural gas pipeline project came in above the funding it has already secured for the project, according to Ranchester Mayor Peter Clark, who chairs the TRVJPB.
Clark said the board received three bids after advertising the project for bidding in late September — one for about $10 million, one for about $6 million and one for about $5 million — all of which cost more than the roughly $4 million in loan funding the TRVJPB has been awarded by the United States Department of Agriculture for the project.
“That shouldn’t be unexpected — we’ve been working on this project for six years and prices go up,” Clark said.
The bid that came in around $5 million is “in range” of what the board can afford, however, Clark said.
The TRVJPB plans to apply to the USDA for roughly an additional $1 million and Clark said he does not expect securing that additional funding will be an issue.
“(The USDA) doesn’t seem to think it will be a problem getting the extra money,” Clark said. “What we’ll do is we’ll borrow more and amortize it out over three years to make it more affordable.”
But applying for the additional funds will require more paperwork from both the USDA and the bank providing interim financing for the project and that could take time, Clark said.
“They’ve asked us for a lot more financial information than we’ve had available,” Clark said. “All of our pro forma financing was done in a little bit of a different format…and in the last couple of days or so they’ve asked for some additional details.”
The good news for the TRVJPB, though, is the interest rate attached to the USDA loan has already dropped from where it was originally and could drop further when the board applies for more funding.
Clark said he also has plans to meet with Montana-Dakota Utilities next week regarding regulatory details the board would have to clear up before finalizing a bid on the project.
Clark said he hopes to have both the funding and regulatory issues settled by the TRVJPB’s next regular meeting, which is scheduled for Dec. 19. If developments occur before that meeting date, though, Clark said he will call a special meeting to obtain board approval.
The TRVJPB — a partnership between Dayton, Ranchester and Sheridan County School District 1 — has been working since 2013 to build a natural gas pipeline that could supply communities in the Tongue River Valley.