NASHVILLE - The city of Chattanooga has won approval for a $42.5 million low-interest loan from the state for local wastewater infrastructure improvements as local officials continues to work their way through a federal Environmental Protection Agency consent decree.
Gov. Bill Haslam and Tennessee Environment and Conservation Commissioner Bob Martineau announced the loan today, the biggest item in more than $60 million in loans to five community and one water and water and wastewater authority.
"It is important for our communities to address current infrastructure needs and prepare for future needs," Haslam said in a news release. "The funds available through the State Revolving Fund Loan Programs help fulfill these needs while protecting public health."
The $42.5 million for Chattanooga is for water and wastewater treatment plant improvements and a collection system rehabilitation project.
As a result of the city's negotiated agreement with EPA back 2012, Chattanooga is spending an estimated $250 million to fix an aging sewer system that during heavy rains can send hundreds of thousands of raw waste flooding into the Tennessee River, the city's source of drinking water.
Tennessee's 20-year wastewater loan to the city carries a 1.29 percent interest rate.
The State Revolving Fund (SRF) Loan Program provides low-interest loans that help communities, utility districts, and water and wastewater authorities finance projects that protect Tennessee's ground and surface waters and public health. Loans are used to finance the planning, design and construction of water and wastewater facilities.
Loans are channeled through two separate programs: Tennessee's Clean Water State Revolving Fund Loan Program (CWSRF) and the state's Drinking Water State Revolving Fund Loan Program (DWSRF).
Traditional drinking water loans were announced today for the following recipients:
State officials also announced that the city of Cleveland is receiving a $3.725 million revolving fund program loan for a new water transmission main project. The 20-year loan carries a 1.11 percent interest rate.
Since its inception in 1987, Tennessee's Clean Water State Revolving Fund Loan Program has awarded more than $1.6 billion in low-interest loans, state officials say. Tennessee's Drinking Water State Revolving Fund Loan Program, started in 1996, has awarded more than $284 million in low-interest loans.
The State Revolving Fund (SRF) Loan Program provides low-interest loans that help communities, utility districts, and water and wastewater authorities finance projects that protect Tennessee's ground and surface waters and public health. Loans are used to finance the planning, design and construction of water and wastewater facilities.
Both programs combined award more than $90 million annually to Tennessee's local governments for water and wastewater infrastructure projects.
"These loans will keep our communities moving forward," Commissioner Martineau said. "The loans and principal forgiveness help fulfill infrastructure needs that will protect public health and help communities foster economic development, especially in rural communities."
The Tennessee Department of Environment and Conservation administers the SRF Loan Program for the state in conjunction with the Tennessee Local Development Authority. EPA provides grants to fund the program. Tennessee provides a 20 percent match.
Loan repayments are returned to the program and are used to fund future SRF loans. Interest rates are often less than local governments can find on the private market with some interest charges at zero percent.
Some loans utilizing EPA grant funds can include a principal forgiveness component. But Eric Ward, deputy communications director with TDEC, said in response to an inquiry that the Chattanooga loan does not include principal forgiveness.