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County and Service Authority review $2.235M Lovingston sewer rehabilitation financing proposal
Summary
Nelson County staff reported a USDA/RUS financing package for a $2,235,000 Lovingston sewer rehabilitation project: $1,594,000 grant and a $641,000 loan at 2.25% over 40 years, with an annual cost of $24,384; the Service Authority has requested a nonbinding Support Agreement so the County can annually transfer $24,384 by appropriation to count as system revenue.
County Administrator Candice W. McGarry reported on a proposed financing package for a $2,235,000 sewer rehabilitation in Lovingston that aims to address sewage overflows and environmental problems.
Under the proposal from the U.S. Department of Agriculture's Rural Utilities Service, the project would be funded with a $1,594,000 grant and a $641,000 loan structured as a 40-year wastewater utility bond with a 2.25% interest rate, producing an annual cost of $24,384. The Nelson County Service Authority must demonstrate sufficient system revenues to cover the annual debt service; in lieu of a rate increase, the Service Authority and county have discussed a Support Agreement whereby the County would annually transfer $24,384 by appropriation to the Service Authority. County staff described that the Agreement would be a moral obligation pledge, nonbinding and not obligating future Boards.
If USDA/RUS approves the Support Agreement and funding package, the plan would be presented to the Board of Supervisors and the Service Authority Board for formal approval in coming months.
What happens next: USDA/RUS must approve the Support Agreement; the Service Authority and the County will consider formal approval of the financing and any required rate or budget changes.
