The Tennessee Local Development Authority on Oct. 20 approved a $27,000,000 Clean Water State Revolving Fund loan to the City of Springfield to help complete a new wastewater treatment plant.

The loan, approved for a 20-year term at a 2.93% interest rate with no loan forgiveness, was recommended by SRF staff after a review of the city’s technical and financial documents. SRF staff said the request, coupled with prior SRF loans for the project, will cover the project’s total cost of $74,000,000.

Ms. Jones, SRF staff, told the board the City of Springfield serves 7,658 customers in Robertson County and reported operating revenue of $9,226,000. “These revenues are sufficient to service the debt from this loan request,” she said. She also said the city has pledged an amount equal to its annual debt service—$1,785,564—from its share of state taxes.

The loan drew one substantive question from Commissioner Bryson, who noted that the pledged amount expressed as a percentage of state shared taxes exceeded 200% and asked about the implication. Ms. Jones replied that SRF would not need to access the state-shared-tax pledge so long as the city continues to generate revenues that exceed debt service and said the loan is being underwritten based on the city’s operating revenues. “There’s no way … they would actually default on that loan,” she said, describing the pledge as a backstop rather than the primary repayment source.

The motion to approve passed on a roll-call vote: Treasurer Lillard — Aye; Secretary Hargett — Aye; Comptroller Mumpower — Yes; Commissioner Bryson — Aye; Mayor Brown — Aye; Mayor Bradshaw — Aye. The clerk recorded the item as approved.

SRF staff also noted that if the board approves the loan the authority’s unobligated Clean Water SRF balance would fall to $337,129,073. SRF staff said the loan package submitted met SRF application requirements, including public notice and necessary technical documentation.

Next steps are standard loan-closing procedures and execution of loan documents before disbursement.