HIGH SPRINGS – High Springs may lose $1.6 million in grant money from the U.S. Department of Agriculture, backing up the city’s five-phase sewer project for the foreseeable future.

In a letter received Oct. 24, USDA Area Director R.C. Quainton II informed the city that it plans to de-obligate, or take back, money granted in 2005 for the second and third phases of the High Springs’ sewage system. While the project was originally assessed at a cost of $10 million, the expansion actually cost about $8 million.

“The Phases Two and Three project has been fully completed at a cost significantly less than originally estimated by the project engineer,” Quainton said in the letter. “When there is a significant reduction in project cost, the applicant’s funding needs to be reassessed.”

The city planned to use the extra money to pay the costs of hooking up residents to the sewage system. However, the letter explained that grant funds must be used within five years of issuance, a timeframe the city failed to meet.

Then city commission candidate, and newly elected commissioner Bob Barnas said at the Nov. 3 commission meeting that he contacted United States Senator Bill Nelson about the sewage system, concerned that “waste and mismanagement” had occurred in the commission’s handling of the project.

The USDA said upon reviewing the information, “We found that the allegations are not substantiated.”

Barnas also said High Springs staff members knew about the possible loss of funding in September, before they received the USDA letter. He said Mayor Larry Travis secretly planned to meet with Nelson about the issue at the President’s Box at the University of Florida’s Ben Hill Griffin Stadium during a football game.

Travis said contact had been made with Nelson’s office to set up a meeting to discuss options, but it never occurred. He said they also discussed meeting in Washington D.C., a trip Travis would have undertaken at his own cost.

“There were no secret meetings,” he said. “I go to the President’s Box because I’m invited there. I have a pretty good reputation at the university. I haven’t seen Mr. Barnas there.”

Interim City Manager Jenny Parham admitted that the Rural Development agency requested one meeting at the end of August about the issue with her, Travis and City Attorney Thomas DePeter. However, she said that at thes Sept. 12 meeting they were told no action should be taken until official notification was received.

Commissioner Dean Davis said according to the letter received from USDA, the city has known about having to spend the extra money for a year. However, he said he was not aware about the situation until the recent controversy.

“I am as surprised as anybody about what we just went through as a city commission,” he said.

He said High Springs has missed similar government grant deadlines before and has never had leftover money de-obligated.

“They’ve never done this before,” he said. “They’ve always let us use it.”

Resident Thomas Weller said he suspected complaints about the project led to the ruling. He said he found it interesting that Barnas received a response to his letter merely three days after the city was officially informed of the de-obligation.

“You know, when you rock the boat, people get ticked off, and they just find it easier to say no,” he said.

Other citizens blamed former City Manager Jim Drumm, Parham, DePeter, Travis and engineering firm Jones Edmunds for the situation. Resident Ron Langman said both Drumm and Jones Edmunds, the city’s sole contracted engineering firm at the time, should have informed the city that time was up on the funds. However, he also said the current commission had an obligation to inform the city of the issue, calling for the resignation of Parham and DePeter.

“It’s either you guys up there are covering this up, all five of you, or four of you are clucks, sitting up there watching it happen,” he said. “It’s seamy, it’s despotic and it’s not okay.”

DePeter said the city’s options are to ask for an informal review, mediation or an appeal. He recommended the city ask for an appeal, though he thought the odds of winning the suit were “less than 50 percent.”

Former Mayor John Hill was on the commission when the sewage project was approved. He said the first three phases were essential for the city because the Santa Fe River was being intoxicated with nitrates.

The final two phases were planned based on the population increase suggested by the 1990 census, Hill said. The USDA put the fourth phase of the project on hold because the level of new development in High Springs has “significantly decreased” since projections were made in 2008.

“The City of High Springs will be required to submit to Rural Development a wastewater system rate schedule and operating budget that supports project and system financial viability,” the USDA’s October letter said.

The project was originally approved in 2001 with an expected cost of $26 million. DePeter explained that it was designed in five phases so that the city could complete the project using a funding split of 55 percent loan and 45 percent grant.

The undertaking was proposed in a redevelopment plan prepared by the University of Florida in 1986.

“Lack of a city-wide sewage plan is a severe health hazard for High Springs,” the plan read. “Due to the inevitable contamination to the water supply if a leak occurred in the septic system, the health of all High Springs residents would be at risk.”

The plan further explains that citywide septic systems may be a factor slowing the growth of High Springs because businesses do not want to open in a city without wastewater facilities.

The commission voted 4-1 in favor of requesting an appeal. Davis voted against the action.