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Tennessee announces $66.8m in drinking water and wastewater loans for five communities

  • Tennessee announces $66.8m in drinking water and wastewater loans for five communities
    Image: Tennesse State Government

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Tennessee State Government
TN Dept. of Environment and Conservation programs protect health and the environment while supporting economic development, job creation and quality of life.

Tennessee Gov. Bill Lee and the Tennessee Department of Environment and Conservation Commissioner David Salyers announced that five communities will receive $66.8 million in low-interest loans for clean water and drinking water infrastructure improvements.

The loans announced are for the City of Chattanooga, the City of Cleveland, the City of Humboldt, the City of Memphis, and the City of Springfield.

“I’m pleased to see our communities are getting the help they need for infrastructure development,” Lee said.

Tennessee’s Revolving Fund Loan Program maintains priority ranking lists for both the Drinking Water State Revolving Fund and the Clean Water State Revolving Fund. Over $90 million is loaned annually to cities, utility districts, and energy or water/waste water authorities, with projects appearing on the priority ranking lists for planning, design, and construction of eligible water and wastewater projects.

“These programs help communities make updates they need in infrastructure, and we are glad we can assist in this way,” said Salyers. “Abundant, clean water is important to quality of life in Tennessee, and this program is an excellent way to make such improvements affordable.” 

Through the State Revolving Fund Program, communities, utility districts and water and wastewater authorities can obtain loans with lower interest rates than most can obtain through private financing. Interest rates for loans can vary from zero percent to market rate based on each community’s economic index. Loans utilizing EPA grant funds can also include a principal forgiveness component.

Tennessee’s Clean Water State Revolving Fund Loan Program has awarded more than $2 billion in low-interest loans since its inception in 1987. Tennessee’s Drinking Water State Revolving Fund Loan Program has awarded more than $300 million in low-interest loans since its inception in 1996.

The Department of Environment and Conservation administers the State Revolving Fund Program in conjunction with the Tennessee Local Development Authority. The U.S. Environmental Protection Agency provides grants to fund the program, and the state provides a 20 percent match. Loan repayments are returned to the program and are used to fund future SRF loans.

Clean water loans are announced for the following recipients:

  • City of Chattanooga (Hamilton County) – The City of Chattanooga will receive two loans totaling $24 million for inflow and infiltration correction for Dobb Branch Sewer improvements and inflow and infiltration correction for the South Chickamauga Sewer Basin. The first loan is for $3 million with federal funding in the amount of $2,700,000 and an additional $300,000 in principal forgiveness that will not have to be repaid. 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.
  • City of Cleveland (Bradley County) – The City of Cleveland will receive a loan increase in the amount of $379,500 for its collection system expansion to include the installation of approximately 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.
  • City of Humboldt (Gibson County) – The City of Humboldt will receive two clean water loans totaling $10,900,000 for wastewater treatment plant upgrades. The first loan is for $3 million with federal funding in the amount of $2,700,000 and an additional $300,000 in principal forgiveness that will not have to be repaid. 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 $7.9 million. Both loans have a 20-year repayment period at an interest rate of 0.97 percent.
  • City of Memphis (Shelby County) – The City of Memphis will receive a loan for $6,500,000 for inflow and infiltration correction to rehabilitate approximately 53,000 linear feet of sewer lines. The project is funded from the State Revolving Fund with a 20-year repayment period at an interest rate of 1.20 percent.
  • City of Springfield (Robertson County) – The City of Springfield will receive a loan increase in the amount of $19,000,000 for collection system replacement to address sanitary sewer overflows (including installation of approximately 18,000 linear feet of sewer lines) as well as inflow and infiltration correction of approximately 3,900 linear feet of sewer lines with construction of a 4 MG wastewater storage tank at Carr Creek and a 5 MG wastewater storage tank at Sulphur Creek. The project is funded from the State Revolving Fund with a 20-year repayment period at an interest rate of 1.30 percent.

Drinking water loans are announced for the following recipients:

  • City of Humboldt (Gibson County) – The City of Humboldt will receive three drinking water loans totaling $6,000,000 for water treatment plant and water distribution system improvements. Two loans are for $1 million each with federal funding in the amount of $800,000 each and an additional $200,000 each in principal forgiveness that will not have to be repaid. The third loan is a companion loan funded from the State Revolving Fund at $4 million. All three loans have a 20-year repayment period at an interest rate of 1.22 percent.

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