The Seminole Utilities Authority on Tuesday approved a $1.6 million agreement for engineering services at the city’s sewer plant, but the city does not have the money in reserve to pay for it.

City Manager Steve Saxon asked the authority to make the contract contingent upon “bridge financing,” which he would seek from local banks. Bridge financing is a temporary financing option that is used by entities for projects until a long-term option can be secured.

“We may have to pledge a hard asset such as our golf course as collateral,” Saxon told the board. “Normally cities would pledge something like revenue from a utility in these situations, but that’s already pledged.”

The contract is with Wall Engineering, who will help bring the sewer plant into compliance with the Department of Environmental Quality (DEQ) until a new plant can be built.

“This project is to only hit benchmarks that will satisfy the DEQ,” Saxon said. “We still need a new sewer plant, whether we pay for it with a bond election and/or grants.”

As reported in the Jan. 17 edition of the Seminole Producer, the plant has been hit with multiple DEQ violations and the city has been spending anywhere from $350,000 to $500,000 each year in efforts to keep it up and running. The plant is several decades old and its primary clarifier, a unit that removes solids from wastewater, has been out of service for about 10 years.

“We’re going to have to rally together and build a new sewer plant,” Saxon told the authority in January. “The DEQ is sending us a loud message: they’re ready for us to build a new plant.”

The proposal to approve the agreement received unanimous approval by the authority, which is comprised of city council members. Saxon indicated he would begin the process of obtaining the financing immediately.