It is the goal of every Rural Development program to help improve the economy and the quality of life in rural communities across this country – but with some projects, the impact of agency investment is not always obvious in the early stages. Once in a while, however; you have one that creates an economic domino effect with a return on investment that is nearly immediate.

A great example of such a project is taking place in Mercer County, Ky., and involves the expansion and upgrade of the Harrodsburg Water Treatment Plant. In 2010, Rural Development obligated an $11 million loan/grant combo to the fund the expansion which will increase the plant’s capacity from four to six million gallons per day (MGD).

Just as city officials prepared to break ground on the water expansion project, a local manufacturer announced plans for a $220 million expansion project of its own – one that is a direct result of Rural Development’s investment in the water treatment plant.

Wausau Paper will begin work this summer to expand its Harrodsburg plant, which has been in operation since 1990. The expansion will create nearly 400 jobs – both in the facility and during construction – and increase the plant’s production of towel and tissue products by about 75,000 tons annually.

Wausau CEO Thomas Howatt has said this investment was the largest in Wausau’s history. As a result of the expansion, the company will add 76 new jobs to add to its current workforce of 397. The expansion project also will create an additional 300 construction jobs during peak building, according to Howatt.

The Harrodsburg Water Treatment Plant is the potable water supply for nearly 10,000 customers in Harrodsburg in Mercer County, including three wholesale customers – North Mercer Water District, City of Burgin and Lake Village Water Association. Mercer County is located in Central Kentucky and has seen steady population growth over the last 60 years – a trend that was confirmed with the release of the 2010 Census data. Given its proximity to Lexington, that growth is projected to continue through 2025 and beyond.

The city needed Rural Development’s assistance because its existing plant is aging, much of the equipment is outdated and the demand for potable water from the treatment plant has been increasing for years. The existing water treatment plant needs to expand and improve its process due to the increased demand for water, as well as EPA regulations pertaining to disinfection byproducts. The city meets the regulations that are currently in place, but it may not be able to meet future, more stringent regulations without improvements to the treatment process.

Rural Development worked with state officials to make the project happen. Other funding sources for the project include a $1 million grant from the HUD Community Development Block Grant program to round out the $12 million project, which has been under construction for two months.

Background

In calendar year 2010, the Harrodsburg treatment facility operated at 70 percent of its rated capacity on an average day. On hot and dry days, the water plant was operating 23 hours per day or more. Of course, no treatment plant can withstand continuous operation for long because it does not allow for normal maintenance activities – some of which cannot take place while the plant is treating water.

During the city’s application process with Rural Development, Harrodsburg was quietly involved in a competition to expand an existing local industry – Wausau Paper. Wausau was planning to add production capacity somewhere in America, and Harrodsburg officials wanted that expansion to occur at its existing plant. However, the company had very specific demands for water and wastewater service, and Wausau was looking for an expansion site that could provide both its need for additional potable water and additional wastewater treatment capacity.

When Wausau’s expansion is complete and new production begins, the company estimates its additional water needs to be about 628,000 gallons per day (19 million gallons per month). Further, Wausau’s expansion would create an additional 375,000 gallons of wastewater daily (11.4 million gallons per month). The wastewater would have an organic strength of only about one-third to one-half that of normal domestic wastewater.

Harrodsburg currently has a 2.68 MGD wastewater treatment plant with a calendar year 2010 average metered flow of only 1.163 MGD. On the potable water side of the equation, Harrodsburg could meet Wausau’s projected need only if the water treatment plant upgrade and expansion was in place. When the perspective timetables were compared, the Harrodsburg water treatment plant project was expected to be finished two months before Wausau would need to initiate its purchase of additional water.