State grants $24 million in loans for clean-water projects in Chattanooga

State grants $24 million in loans for clean-water projects in Chattanooga

TDEC announces $66.8 million in drinking water and wastewater loans for 5 Tennessee communities

February 19th, 2019 by Staff Report in Breaking News

Chattanooga has been granted two loans from the state totaling $24 million for clean-water projects under the city's consent decree.

Some of that money will go toward improvements in the Dobbs Branch Basin, which runs roughly west from the foot of Missionary Ridge. It passes near Oak Grove, East Lake and Park City before joining Chattanooga Creek on the south side of Interstate 24.

The rest will go to rehabilitate sewer lines in the South Chickamauga Creek area and build a new wastewater pump station at the Riverport near the Hamilton County Election Commission, also serving the South Chickamauga Creek area.

It's part of $264 million the city has committed to spend to date to stop sewage overflows into the Tennessee River under supervision of the U.S. Department of Justice and the Environmental Protection Agency. The cost of repaying the loan is built into the city sewer fee.

The city signed the consent decree in 2013, after multiple lawsuits over raw sewage spilling into the Tennessee River, and is a little more than halfway through the first phase of rehabilitation and repair ahead of a July 2020 deadline.

The first loan is for $3 million with federal funding in the amount of $2.7 million and an additional $300,000 in principal forgiveness that will not have to be repaid, according to a news release from the Tennessee Department of Environment and Conservation Commission. A $3 million cap applies to the federal funding in the clean water loan program. A companion loan is funded from the State Revolving Fund at $21 million. Both loans have a 20-year repayment period at an interest rate of 2.05 percent, the release states.

The announcement is part of $66.8 million awarded to five communities across Tennessee for clean water and drinking water infrastructure improvements through the Revolving Fund Loan Program.

Other Tennessee cities getting loans are Cleveland, Humboldt, Memphis and Springfield.

Cleveland will receive a loan increase in the amount of $379,500 for its collection system expansion to include the installation of about 7,750 linear feet of sewer lines to replace septic tanks. The project is funded from the State Revolving Fund with a 20-year repayment period and an interest rate of 1.56 percent.

"I'm pleased to see our communities are getting the help they need for infrastructure development," Gov. Bill Lee said in a statement.