Waynesville approves state loan, accepts revised special order with DEQ to keep sewer plant repairs on track

The Waynesville Town Council voted to accept a third-phase, 0% state cash‑flow loan and to adopt a revised Special Order of Consent negotiated with the North Carolina Department of Environmental Quality to allow temporary increases in sewer capacity while the town finishes repairs to its wastewater treatment plant.

Town staff described the measures as short‑term steps to protect the town’s fund balance as the town awaits FEMA reimbursement for storm damage and completes repairs. Rob (staff member) told the council, “These cash flow loans are are 0% interest loans meant to hold the town's fund balances over until such time as FEMA reimburses us for our cost.”

Why it matters: The council’s actions free up temporary discharge capacity and provide cash on hand so the town can pay contractors for large restoration projects — notably the new ball fields and dog park — while FEMA processes reimbursements. Council members were told DEQ’s revised order also waives previously assessed fines and provides a short-term increase in permitted flow that will allow development applications that had been waiting for sewer capacity to move forward.

What the council approved and how it works - Phase 3 cash‑flow loan: Staff said the Office of the State Auditor offered a third short‑term loan of $298,671.71. Combined with earlier phase 1 and 2 loans, the town now has about $1,105,154.47 available in 0% loans to bridge timing gaps while FEMA reimbursements arrive. Staff summarized the loan payback schedule as follows: $1 due on the first anniversary, then staged percentage repayments over subsequent years (with 10% due 06/30/2027, 20% due 06/30/2028, 30% due 06/30/2029 and the remainder thereafter). The council voted to accept the loan.

- Revised Special Order of Consent (SOC) with DEQ: Staff said DEQ’s revised SOC (a new agreement, not an amendment to the 2020 order) waives certain prior penalties and grants the town an additional 56,000 gallons per day of permitted flow for a limited period tied to completion of plant upgrades. Rob said the town had been negotiating to reduce financial penalties and to regain development capacity after the prior order limited growth. Council approved adopting the revised SOC as presented.

Staff context and outstanding risks Rob and other staff stressed that the town has already received some FEMA reimbursements — “we have already been paid back about $630,000,” Rob said — but large projects remain unfunded until FEMA finalizes recovery and mitigation awards. Staff described ongoing anxiety about how FEMA will calculate eligible reconstruction and mitigation amounts; if FEMA’s estimated base‑repair costs are low compared with proposed higher‑resilience designs, the town could face out‑of‑pocket costs.

Town staff also said the wastewater treatment plant is nearing completion of critical repairs (described as roughly 95–96% complete by staff), but a few pieces of equipment — notably primary clarifiers and disc filters damaged by flooding — still require work. Once those elements are back online and the town formally declares the plant complete, DEQ’s revised SOC conditions will be satisfied and the temporary flow allotment will remain in effect only as specified by the agreement. DEQ must sign the SOC in Raleigh and may take the item to the Environmental Management Commission; staff estimated a multi‑week period before final signature and urged developers to await the formal notice.

Council reactions and next steps Council members praised staff remedial work and urged timely follow‑through. The council approved the loan and adopted the revised SOC in motions recorded on the meeting minutes. Staff said they will notify the development community once DEQ gives final, signed approval and will continue to press FEMA for final reimbursement estimates for the large community projects the town is planning.

Votes at a glance - Phase 3 state cash‑flow loan ($298,671.71): approved by council (motion seconded; unanimous voice vote). - Adoption of revised Special Order of Consent negotiated with DEQ (waives prior fines, grants temporary additional 56,000 gpd): approved by council (motion seconded; unanimous voice vote).

Ending: The loans and the DEQ agreement were presented as temporary tools to manage cash flow and sewer capacity while the town completes repairs and awaits FEMA decisions. Staff said they expect the DEQ signature process to take several weeks and will provide updates when the SOC is signed in Raleigh.