The Chattanooga City Council recently approved a $7.8 million project to seal pipes from East Brainerd to the edge of Ooltewah, one of the biggest projects in the long list of federally mandated fixes to the city's 130-year-old sewer system.
Most of the work sealing 50,000 linear feet of pipe won't interfere with neighborhoods or create many traffic problems because officials said they can use manholes to avoid digging up most roads.
The council faces a series of large, costly decisions across the city, from fixing hundreds of miles of underground sewer lines to planting trees, to stop a historic neighborhood's flood woes and fix a leaking sewer system.
Federal regulators slapped Chattanooga with a $250 million consent decree in July 2012, saying the broken system had dumped more than 354 million gallons of raw sewage into the Tennessee River since 2005.
The city was ordered to complete an $800,000 stream restoration project and pay $476,400 in civil penalties. The city paid half the penalty to the federal government in cash. The other half is to be used to solve water runoff problems in the Highland Park neighborhood.
The projects span the next 15 years, but a majority of the fixes to improve the sewage leaks and water overflow will be tackled in the first phase, about 6.5 years.
Several council members say their concern is making sure the city doesn't borrow more money for the work than it can pay back, and that sewer fees for residents and businesses, which spiked 10 percent this year, are reasonable.
"This council is very concerned as to whether we put ourselves in a position that is burdening ourselves with more debt then we need," Council Chairman Yusuf Hakeem said. "The desire is that the council be good stewards of taxpayers' money."
To have better oversight, Hakeem has asked the Public Works Department for bimonthly or quarterly updates on what the city is spending and what companies are winning the bids for the millions of dollars of contracted work.
Several council members said they don't have a benchmark for where they'd like to see the city's debt capped, but they want to be assured it can be paid off throughout the process. They also don't want it to affect the city's AA+ credit rating.
On Tuesday the council will have an educational session to teach officials about the city's debt, including debt incurred from the consent decree, Hakeem said.
This summer the city received a $33.1 million loan from the state. That's how the most recent project in East Brainerd, estimated at $18 million, will be funded.
Public Works Director Lee Norris said the city is applying for another loan from the Tennessee Local Development Authority for $66.8 million.
That money will pay for 13 more projects over the next five years.
Norris said officials have a plan to pay back the loan by gradually raising the stormwater fees that residents pay. Last year, officials estimated there would be about a 10 percent increase in rates each year for the next five years. However, that figure could fluctuate. This year the rates rose nearly 10 percent, which for the average home equals a $2.84 monthly increase.
"We just can't borrow money without a mechanism to ensure we have the revenue to pay it back," Norris said.
The good news for the city, said Michael Marino, operations manager with Jacobs Engineering, is that the work is ahead of schedule. There are 50 tasks or projects slated for the first five years.
At a recent environmental summit, Marino calculated the numbers. The federal government started counting in April; by September, with 79 months to go and five months complete, 16 percent of the projects were in progress.
Of the $152 million first phase, Marino calculates that 26 percent of the contracts are committed for $40 million, right under budget.
One of the projects expected to better one historic neighborhood hasn't started. But the plans have been submitted to the U.S. Environmental Protection Agency.
Highland Park has had problems for years with water runoff from clogged drain systems. Half the city's fine under the consent decree will go to fix the neighborhood as part of a pilot program to find ways to drain the water without using traditional concrete ditches and sewer grates.
That project will include adding a green space in the middle of Addison Road and constructing sidewalks along the street, improvements that residents are anxious to see.
"We're definitely looking forward to it," said Mike Wilson, the neighborhood association president. "This is a step in the right direction that hopefully we can see in other areas of Highland Park."
Pending approval from federal regulators, Marino estimates that officials will ask the city to include the money in the 2015 budget to start work next year.
Councilman Moses Freeman said he believes the city is in a position to get ahead of the sewer and water runoff issues, if the city continues to manage the debt.
"I think we're in a better position and better staffed to avoid any more lawsuits by the federal government and state as well," he said.
Contact staff writer Joy Lukachick at email@example.com or 423-757-6659.