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TLDA approves $6.3 million in Drinking Water SRF loans for McMinnville and Watts Bar Utility District
Summary
TLDA approved two Drinking Water State Revolving Fund loans totaling $6.3 million: $5.3 million to McMinnville for water treatment plant work with $2.12 million in principal forgiveness, and $1 million to Watts Bar Utility District for meter replacements with $500,000 principal forgiveness.
At its Feb. 13, 2025 meeting, the Tennessee Local Development Authority approved two Drinking Water State Revolving Fund loans totaling $6,300,000, staff reported.
Paula Mitchell, deputy director for the Division of Water Resources, said the drinking water SRF unobligated balance as of Dec. 16, 2024, was $80,046,218 and that an $8,700 return from the city of Maynardville raised the balance to $80,054,918. Approving the two loans would reduce the available balance to $73,754,918.
The authority approved a $5,300,000, 20-year loan for the city of McMinnville to fund water treatment plant improvements, including rehabilitation of raw water pumps, sedimentation basins, filters, the pipe gallery, control building, electrical components, controls, and campus security upgrades. McMinnville’s ability-to-pay index was 30, qualifying it for a tier 2 interest-rate reduction calculated at 1.72%. TDEC and TDEC staff recommended 40% principal forgiveness on this loan; Mitchell said $2,120,000 would be forgiven and not repaid to the revolving fund. The project’s total cost was stated as $11,000,000; it ranked 78th out of 143 projects on the 2022 priority ranking list. Mitchell reported McMinnville’s annual operating revenues at $5,570,803, a current user rate of $36.23 per 5,000 gallons, a customer base of 6,435, and timely audit and budget filings. Financial sufficiency reviews conducted on Dec. 17 and Dec. 30 found the city sufficient to repay the loan at its current rates. The borrower pledged unobligated state-shared taxes equal to the maximum annual debt service for the loan.
The second approved loan was for Watts Bar Utility District: a $1,000,000, 15-year loan to install approximately 3,600 automatic meters across the distribution system. Watts Bar’s ability-to-pay index was 20, making it eligible for a tier 1 interest-rate reduction calculated at 1.06%. Staff recommended 50% principal forgiveness ($500,000). Mitchell reported Watts Bar’s operating revenues as $6,842,378, a current user rate of $88 per 5,000 gallons, and a customer base of 7,277. She said Watts Bar submitted a timely audit on Feb. 14, 2024, and that its budget was in compliance. In addition to the loan terms, Mitchell said Watts Bar offered an additional security deposit equal to one year’s maximum annual debt service to be deposited with TLDA before disbursement.
Following the presentation, the chair moved to approve both drinking water loans; the motion was seconded and approved by oral vote. The transcript records the approvals but not roll-call vote details.
Votes at a glance: Drinking Water SRF loans to McMinnville ($5.3M, 40% principal forgiveness) and Watts Bar Utility District ($1.0M, 50% principal forgiveness) approved Feb. 13, 2025.
