Tennessee Local Development Authority approves two drinking-water SRF loans totaling $3.975 million

The Tennessee Local Development Authority unanimously approved two drinking-water loans at its March 24, 2025, meeting, awarding a $2,875,000 loan to the City of La Follette and a $1,100,000 loan to Perryville Utility District.

The loans were packaged together and approved by roll call after a presentation from TDLDA staff member Miss Jones, who reviewed fund balances and new federal funding available through the Infrastructure Investment and Jobs Act (IIJA). The board voted aye in roll call by Secretary Hargett, Commissioner Bryson, William Wood, Jamie Wehman, Mayor Brown and Mayor Bradshaw (telephonic participation). The motion passed and both loans were approved.

Miss Jones told the board the authority's unobligated drinking-water loan balance would be $69,779,918 if the loans were approved and noted additional IIJA capitalization grants for lead service line replacement and for emerging contaminants. She said IIJA capital funds for lead service lines from federal fiscal years 2022 and 2023 total $118,097,948 (with total funds for obligation noted as $187,877,866) and emphasized that “lead service line dollars can only be issued to entities doing lead service line replacement and not other projects.” Miss Jones also reported $10,678,347 in IIJA funds for emerging contaminants (FFY2022) and said TDLDA is applying for additional FFY2024 funds.

Details of the approved loans:

City of La Follette — $2,875,000, 20-year loan. The project will fund water-line extensions totaling approximately 22,000 linear feet. The project received loan forgiveness of $1,437,000, leaving a repayment principal of $1,437,500; interest was set at 1.32% under the authority’s disadvantaged-community terms (ATPI = 10). Miss Jones reported La Follette’s operating revenues at $8,277,097, serving about 10,554 customers at an average billed rate of $44.35 per 5,000 gallons. The city held its public hearing on the project in February 2025. The presentation noted the city filed its audit late and staff are working with the borrower to ensure timely future filings; the utility board did file timely. The borrower pledged state-shared tax receipts equal to the maximum annual debt service as security.

Perryville Utility District — $1,100,000, 20-year loan. The project will replace about 1,450 meters with automatic meter readers and make some storage-tank improvements. The district received 50% loan forgiveness, leaving a repayment principal of $550,000; interest was set at 1.15% under the disadvantaged-community terms (ATPI = 10). Perryville reported operating revenues of $496,792, about 1,475 customers, and a billed rate of $35.50 per 5,000 gallons. The district held its public meeting in November 2024, filed its audit on time and pledged a security deposit equal to one year of the maximum annual debt service ($30,792) to be deposited with TDLDA before disbursement.

The board packaged both loans into a single motion and approved them by roll call with no discussion amendments. After the vote the chair closed the loan item and the meeting proceeded to adjourn.

The authority’s presentation also previewed that the town of Clifton is expected to use emerging-contaminant funds next month to add treatment components at its drinking-water plant. No further actions or conditions beyond those described were recorded on the loans.