In February, the Oak Ridge City Council approved the borrowing of $18 million in low-interest state loans to help pay for a $23 million project to fix the municipal sewer system.
On Wednesday, Tennessee officials announced that the loans had been approved.
Eleven communities have been approved to receive more than $203 million in low-interest loans for water and wastewater infrastructure improvements. It’s the largest amount in State Revolving Fund Loans granted in state history, Tennessee Gov. Bill Haslam and Department of Environment and Conservation Commissioner Bob Martineau said in a press release.
The State Revolving Fund 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, the press release said. Loans are used to finance the planning, design and construction of water and wastewater facilities.
Oak Ridge was one of four communities that received a wastewater loan and one of six to receive a traditional wastewater loan. The city will receive a total of $18 million in two 20-year loans with interest rates of 1.15 percent and $400,000 in principal forgiveness that will not have to be repaid.
The money is for sewer system rehabilitation and construction of three equalization basins. The work is being done to comply with a U.S. Environmental Protection Agency order that requires Oak Ridge to repair all sewer system overflows by Sept. 28, 2015.
State officials also announced drinking water and traditional drinking water loans to other communities on Wednesday.
Through the SRF 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.
The Department of Environment and Conservation administers the SRF Loan Program for the state of Tennessee 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.
The funding order of projects is determined by the SRF Loan Program’s Priority Ranking Lists that rank potential projects according to the severity of their pollution and/or compliance problems or for the protection of public health.
Since its inception in 1987, Tennessee’s Clean Water State Revolving Fund Loan Program has awarded nearly $1.5 billion in low-interest loans. Since its inception in 1996, Tennessee’s Drinking Water State Revolving Fund Loan Program has awarded more than $216 million in low-interest loans. Both programs combined award more than $80 million annually to Tennessee’s local governments for water and wastewater infrastructure projects.
More information is available here.