[{"_1":2,"_88":-5,"_89":-5},"loaderData",{"_3":4,"_26":27},"root",{"_5":6,"_17":10,"_18":19,"_20":21,"_22":10,"_23":-5,"_24":-5,"_25":10},"user",{"_7":8,"_9":10,"_11":10,"_12":-5,"_13":-5,"_14":15,"_16":-5},"roles",[],"isAuthenticated",false,"isPremium","planName","subscriptionStatus","featureFlags",{},"insightsBudget","isDevelopmentHost","userPreferences",{},"recaptchaSiteKey","6LcvOJcUAAAAAHsB-gPGfGktcRlKpH7OTIU_dMTD","isImpersonating","impersonation","affiliateStatus","isFreedomPortal","routes/v2/article/layout",{"_28":29,"_30":31},"notFound",true,"relatedArticles",[32,76],{"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":48,"_49":50,"_51":52,"_53":54,"_55":56,"_57":58,"_59":60,"_61":62,"_63":64,"_65":66,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},"mediaId",6727742,"mediaKeyId","5447082-3a4a34d625d1ae641b082f9ee49ef3b2","parentId",5447082,"title","Comptroller raises alarms as TLDA hears Ocoee Utility District financing plan; board asks staff to study advisor bid requirement","audioSeconds",342,"startMs",347000,"endMs",4750,"viewUrl","/Search/View?dp=1&key=5447082-3a4a34d625d1ae641b082f9ee49ef3b2&start=347&end=4","thumbnailUrl","https://assets.pipeline.soar.com/5447082-3a4a34d625d1ae641b082f9ee49ef3b2/thumbnail_347000.jpg","articleUrl","/articles/6727742/Tennessee/Comptroller-raises-alarms-as-TLDA-hears-Ocoee-Utility-District-financing-plan-board-asks-staff-to-study-advisor-bid-requirement","mediaUrl","https://secure.pipeline.soar.com/6727742-80f45ef5faa75c2d48405cd3b757c72b/orig.mp4?Expires=1770527514&Signature=h8eweDdGBlgUJglJcMeqxw92-ksGltkDIzQrqp3XwPZ~gVYcX-HBP8PKddPqJ4NbkCl8nzVvUWBJcuGHS1H8can7TYKPqcxT1OA2qDhmlmtG9HUbx4Vr8-OJegP-rr05BRc9jRqzycsDMCoRDSu5qp5WV4WcTar2i96nY0uMI8pNW85BOIiRatQgDyJqR~CUgBTp3SM6wWZeoKkat~6txj8eGAknCN63-bdr9yKgPAoWF0E-SR1ejirxK6YTsINa0j~IT-yHj0PxX0-SUmGD5Dch2~IM7tgSJb1vKcJhvH7dvb3hLq2YFtArfkTXClU9V4yoddh6xN0ABGfpgNUCPQ__&Key-Pair-Id=KUT5TJCACFTXG","author","Comptroller of the Treasury","date","2025-07-22T15:59:31.853Z","article","The Tennessee Local Development Authority on July 21 heard extended testimony and questions about a proposed financing plan from Ocoee Utility District after the Comptroller of the Treasury said the district is in a period of financial distress and the Tennessee Board of Utility Regulation (TBOR) recently froze the district's ability to borrow.

\"The thing that keeps me up at night as comptroller more than anything is the state of financial health of utilities across the state,\" the Comptroller of the Treasury said, framing his concerns about Ocoee's obligations and the proposed financings.

Ocoee officials described two planned issuances: a $25 million general-obligation offering and a $37.5 million USDA financing (interim bond anticipation note). The Comptroller and TLDA staff said the combined $62.5 million would raise Ocoee's total indebtedness to roughly $80–$90 million if approved. Ocoee officials said the additional debt would fund replacement of deteriorating HDPE pipe, strategic main replacements and a wastewater project intended to serve areas with failing septic systems.

Financial-advisory fees became the meeting's focal point. TLDA staff identified proposed advisory fees of roughly $375,000 for the $25 million GO issuance and $625,000 for the $37.5 million interim issuance, which together approximate a 1.5% fee and about $950,000–$1,000,000 in up-front costs. The Comptroller's office circulated a spreadsheet showing many USDA interim financings statewide with no listed advisory fee. \"The first thing that will stand out to you is that many of those are blank because these utilities did not use a financial advisor,\" the Comptroller said.

Larry Kidwell, president of Kidwell and Company, defended his firm's approach and said a competitive, credit-focused process could lower interim interest costs enough to offset advisory fees. Kidwell described his firm as boutique and said, \"we do not seek to serve a large body of clients... we have few clients,\" adding that his process aims to attract competition and secure a higher short-term credit profile that reduces interest expense.

Advisors and staff discussed USDA interim financing mechanics: interim rates may be based on SOFR plus spread and can vary widely. One adviser presented an example where an interim rate near 6.25% over three years would cost roughly $7.03 million in interest, whereas a structured, credit-rated interim funding approach might produce a much lower all-in interim cost; the adviser estimated a potential differential of about $1.968 million in savings that could justify the advisory fee in that scenario. Ocoee representatives said they had not competitively solicited financial-advisory services since about 2009 and defended their reliance on a long-term advisor who, they said, has previously helped lower borrowing costs.

The Comptroller also raised additional operational and fiscal issues: engineers and advisers told the meeting that HDPE pipe in parts of Ocoee's system is experiencing systemic degradation, reportedly driven by chlorine exposure; the district has spent roughly $8 million in recent years to keep up with pipe failures, according to statements in the meeting. Board members and advisors discussed the district's rate structure and an adopted plan that Ocoee officials said could increase rates by roughly 120% over three years to meet debt-service needs. Ocoee representatives also warned that about $3 million of ARPA matching funds could be forfeited if planned financing and procurement steps do not proceed in time.

After discussion, the Comptroller moved that TLDA staff examine a policy requiring utilities to demonstrate a bid process for financial-advisory services when seeking TLDA approval for loans. The motion was seconded and passed by voice vote.

Why it matters: The questions raised touch on procurement practices, affordability for ratepayers, and risk management for a rural utility facing infrastructure degradation. Advisory fees, interim financing structure and the potential loss of federal/state match funding could materially affect the cost borne by ratepayers.

What remains unresolved: The transcript and discussion indicate TBOR has taken action to freeze Ocoee's borrowing until additional requirements are met; the Comptroller requested written confirmation from USDA that the proposed structure is acceptable. The authority deferred any formal approval pending further documentation and staff work.

Key quote: \"If awarded the higher credit rating... the interest rate for the bonds at 3 years would be somewhere between 3.75% and 4% approximately,\" an advising banker said while explaining how credit enhancement could affect interim costs.

","mediaType","Video","parentTitle","Tennessee Local Development Authority - 7/21/2025","oneSentenceSummary","The Tennessee Local Development Authority on July 21 took public testimony and questioned a proposed borrowing plan for Ocoee Utility District after the Comptroller of the Treasury said the district is in financial distress and that TBOR recently froze its ability to borrow.","taxTitle","Comptroller of the Treasury, Agencies, Boards, Commissions, and Councils, Organizations, Executive, Tennessee","taxId",16844,"location","Tennessee","headline","","shortSummary",{"_33":77,"_35":36,"_37":38,"_39":78,"_41":79,"_43":80,"_45":81,"_47":82,"_49":83,"_51":84,"_53":85,"_55":56,"_57":58,"_59":86,"_61":62,"_63":64,"_65":87,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},6727745,"TLDA approves $4.4 million drinking-water loan for Cedar Grove Utility District",125,150000,275000,"/Search/View?dp=1&key=5447082-3a4a34d625d1ae641b082f9ee49ef3b2&start=150&end=275","https://assets.pipeline.soar.com/5447082-3a4a34d625d1ae641b082f9ee49ef3b2/thumbnail_150000.jpg","/articles/6727745/Tennessee/TLDA-approves-44-million-drinking-water-loan-for-Cedar-Grove-Utility-District","https://secure.pipeline.soar.com/6727745-820a709cc11b2904d1aefc672b7af2df/orig.mp4?Expires=1770527514&Signature=AdAhW~rkD7wrrhqNmurGV6NcCRr2WWkOmgha3DrNKrCiT~fmjDZD3p5d04dT8TOQhpck1NJXYK5szRkVuuQxQKfIFVGO00X6pIhR3JvVCLLXzP-X4apI4MAPLafFzR1mdzlrl1vLGvgMas31AfBGCruk0ITRuA18DRkQF1PcOJeEgBgRLqXdHWU0v7P6cI4iD8qMFKCedRcJ05eNCOLsAO2ovDdCbxYBAddSQzwHMM9772IwEX~pe2enVnh6E6KsGdS99wMvp83WCo9PO3Btv1b~80LySd9m1wgY5f6E3cBWyWTRcBFhlmBbzCmtY-KNHCM7TD0NTNkewBaIzLR9Mg__&Key-Pair-Id=KUT5TJCACFTXG","The Tennessee Local Development Authority on July 21 approved a $4.4 million drinking-water loan to Cedar Grove Utility District in Carroll County to replace aging asbestos water mains.

Vena Jones, a TLDA staff member, told the authority the district requested $4,400,000 to replace about 83,000 linear feet of asbestos pipe and that SRF staff had determined the utility qualifies as a small or disadvantaged community. \"They are eligible for 50% loan forgiveness making the debt request $2,200,000 of repayable principal over 20 years with a 1.97% interest rate,\" Jones said.

The loan was presented as part of a brief review of program balances. Jones reported an SRF unobligated balance of $59,064,109 and said the authority also has $5,490,347 in an emerging contaminants account and $118,097,948 in the lead service line loan fund. Jones said Cedar Grove had provided the required technical, administrative and financial documentation and had pledged a security deposit equal to one year's annual debt service of $133,392.

A board member moved to approve the loan and another member seconded; the authority approved the request by voice vote. The minutes record a voice approval rather than a roll-call tally.

Why it matters: The SRF program provides low-cost financing for water infrastructure; the combination of principal forgiveness and low interest is intended to reduce the rate impact on small, disadvantaged utilities. The authority's packet showed the application and supporting materials were submitted for board review.

What was not specified: The transcript included a reference to the utility's annual revenue and customer count, but the numbers were not clear in the record. The authority's staff memo in the meeting packet is the cited source for the loan-eligibility determination and the forgiveness amount.

Looking ahead: The authority approved the loan request at the meeting; staff will proceed with the loan-closing steps documented in the loan package.

","The Tennessee Local Development Authority approved a $4.4 million State Revolving Fund loan to Cedar Grove Utility District for replacement of asbestos water main; the district qualified for 50% loan forgiveness, making the repayable principal $2.2 million over 20 years at 1.97% interest.","actionData","errors"]

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Comptroller raises alarms as TLDA hears Ocoee Utility District financing plan; board asks staff to study advisor bid requirement

TLDA approves $4.4 million drinking-water loan for Cedar Grove Utility District