The Oak Ridge City Council tonight will consider applying for $18 million in two state loans to help repair all sewer system overflows by September 2015.
The two state loans are low-interest loans granted by the Tennessee Department of Environment and Conservation, and they can be used for engineering and construction costs. Oak Ridge has received two earlier loans, one in 1998 and 2002.
The sewer system project is expected to cost $23 million total. The project, which will start in east Oak Ridge and move west, will also be funded by a $2 million Tennessee Municipal Bond Fund Loan and about $3 million in future debt or an amendment of the state loans.
Funding from the two clean water state revolving loan funds, or SRFs, will total $18 million. One is a $4 million subsidized loan that includes a 10 percent principal forgiveness, and the other is a $14 million unsubsidized loan.
The SRF project will include about 18 sewer and manhole projects, according to a report included in tonight’s Oak Ridge City Council agenda packet.
The  sewer system rehabilitation project included one rate increase effective May 1, 2012, and a second on Jan. 1. Ninety percent of customer bills increased $5 to $25.80 per month, and large commercial bills increased about 30 percent, the city report said.
The U.S. Environmental Protection Agency has ordered Oak Ridge to repair all sewer system overflows by Sept. 28, 2015. Prior to the September 2010 EPA order, Oak Ridge had been spending about $1 million per year to repair its 70-year-old sewer system.
Tonight’s City Council meeting starts at 7 p.m. in the Oak Ridge Municipal Building Courtroom at 200 S. Tulane Ave.
Andrew Howe says
Quickly crunching some rough numbers:
About 30,000 residents in town. Minimum water/sewer per residence now is around $32 (not including the recent price hike). So the city gets around $1,000,000 per year from us. Probably much more than that, since most homes likely use more than the minimum water.
Let’s say the average salary for someone working in the water/sewer system is $30k. That means we can employ around 30 people per year, w/o having much left over to cover materials, operating costs, upkeep, facilities, etc.
To really crunch numbers I’d need to know actually how many people work in the system to see how much is left over for the ancillary costs. And of course, data on those ancillary costs will tell us something too.
But roughly, it seems like the cost of our water isn’t really too out of hand, especially given the knowledge of the state of our system and it’s need for repairs.
Here’s what I REALLY want to know though.
Why are we the people being stuck with the bill for the water/sewer system that wasn’t maintained well by the DOE prior to it’s sale to the city in 2000?
Did the city buy a lemon without any forethought?
Why did the city wait so long to act on this?
It seems this loan could’ve been avoided (or lessened greatly) had the water dept increased our rates back when it acquired the system from the DOE. It also seems like they should’ve had some of these price hikes go into effect back in Sept of 2010 when the EPA came down on us hard.
I have a home with a 20 year old roof. I knew this when I bought the place, so I’ve been saving up for a replacement I know will be needed soon. I’m not going to wait until the roof is on it’s last legs THEN start thinking about the finances of it. I’m not going to need a loan which will cost me more in the long run.
Can someone please post a new article on the nitty gritty of all this, or post info here in the comments section?
Something definitely smacks of bad planning and lack of foresight, if not total financial ineptitude. I hope that’s not the case, but I’ll need convincing otherwise at this point.
I don’t mind paying the rate for water as it is. A bit over a dollar a day isn’t much to pay for the convenience of getting clean water to us and waste water away from us. But somewhere along the line something went off the rails and we can only prevent this from reoccurring if we know why it happened in the first place.
John Huotari says
Andy, as far as I know, the city did not buy the water and sewer system from DOE in 2000. I think most of the infrastructure was turned over by the federal government decades ago. I think there is a more recent history with the city’s water plant at Y-12, but I don’t know the details.