Tennessee Local Development Authority approves four SRF loans totaling $6.994 million

The Tennessee Local Development Authority voted Thursday to approve four State Revolving Fund loans totaling $6,994,097 for wastewater and drinking-water projects in four Tennessee communities.

Paula Mitchell, deputy director for the Division of Water Resources, told the authority the Clean Water State Revolving Fund (CWSRF) unobligated balance as of Dec. 16, 2024, was $249,119,358 and that staff recommended approval of two CWSRF loans totaling $3,694,097. She said the Drinking Water State Revolving Fund (DWSRF) unobligated balance as of Dec. 16, 2024, was $80,046,218 (adjusted to $80,054,918 following an $8,700 return) and that staff recommended two DWSRF loans totaling $6,300,000.

The authority approved the minutes of the Dec. 16, 2024, meeting and then took up the loan items by voice vote; the chair announced the items approved after members answered "aye." No roll-call vote or votes by name were recorded in the transcript.

On the clean-water side, staff recommended:

- A $994,097, 20-year loan to the City of Munford for wastewater treatment-plant improvements, including replacement of influent pumps with above-ground suction-lift pumps. Munford's ability-to-pay index was reported as 60, making the project eligible for a tier-3 interest-rate reduction (2.63%). The project cost equals the requested amount and was listed as ranked 6 of 53 on the 2021 priority ranking list. Munford's operating revenues were reported as $3,006,995; the current user rate cited was $40.02 per 5,000 gallons for 2,360 customers. Staff reported no additional rate increase was required after the financial sufficiency review and that Munford pledged unobligated state-shared taxes equal to the annual debt service.

- A $2,700,000, 20-year loan to the Town of Carthage for infiltration-and-inflow correction, including cured-in-place pipe lining of about 20,000 linear feet and associated manhole work. Staff recommended an 80% loan with 20% principal forgiveness ($540,000). Carthage's ability-to-pay index was 50 (tier-3, 2.63% reduction); the project ranked 25 of 56 on the 2023 priority list. Reported annual operating revenues were $1,811,664; the current user rate was $42.29 per 5,000 gallons for 975 customers. Carthage pledged unobligated state-shared taxes equal to annual debt service.

On the drinking-water side, staff recommended:

- A $5,300,000, 20-year loan to the City of McMinnville for water-treatment-plant improvements (rehabilitation of raw-water pumps, sedimentation basins, filters, pipe gallery, control building, electrical components and controls, plus campus security upgrades). The total project cost was reported as $11,000,000. TDEC staff recommended 40% principal forgiveness ($2,120,000). McMinnville's ability-to-pay index was 30 (tier-2, 1.72% reduction); the project ranked 78 of 143 on the 2022 list. Reported annual operating revenues were $5,570,803, the current user rate was $36.23 per 5,000 gallons for 6,435 customers, and staff found the utility financially sufficient at its current and planned rates. The borrower pledged unobligated state-shared taxes equal to maximum annual debt service for the loan.

- A $1,000,000, 15-year loan to Watts Bar Utility District to install about 3,600 automatic meters. Staff recommended 50% principal forgiveness ($500,000). Watts Bar's ability-to-pay index was 20 (tier-1, 1.06% reduction); the project ranked 25 of 143 on the 2022 list. Reported annual operating revenues were $6,842,378, the current user rate was $88 per 5,000 gallons for 7,277 customers, and staff reported the borrower was required to deposit additional security equal to one year's maximum annual debt service with the TLDA before disbursement.

Throughout the presentations, staff cited public meeting dates required for SRF projects (Munford 12/23/2024; Carthage 01/09/2025; McMinnville 01/09/2025) and timely audit and budget filings for the borrowers. After staff finished, the chair moved approval of the items; the motion was seconded and approved by voice vote.

No members of the public addressed the authority during the public-comment portion, and no substantive debate or amendments to the loan terms were recorded in the transcript. Paula Mitchell concluded, "That completes the loan recommendations today."