Oak Ridge closes on $20 million loan for new water plant

The City of Oak Ridge closed on a $20.7 million federal loan on Thursday for a new water treatment plant in south Oak Ridge.

It’s a Water Infrastructure Finance and Innovation Act, or WIFIA, loan. The funds provided by the federal loan program will be used to design and build the new water plant, which will replace an aging facility on Pine Ridge that has served the community since the 1940s.

The total cost for replacement of the water treatment plant is estimated to be $42.2 million, the city said in a press release on Friday. WIFIA will provide about 49 percent of that cost, with the city using the Tennessee State Revolving Fund Loan Program to cover the balance, the press release said.

“After three years of application and planning, the City of Oak Ridge has reached a significant milestone in the funding needed for a new replacement water plant,” Oak Ridge City Manager Mark Watson said in the press release. “WIFIA has helped Oak Ridge with a low-interest federal loan, allowing us to avoid potential failures in a system originally designed for a different Oak Ridge. The financial terms will allow Oak Ridge to afford these much-needed improvements to serve not only our residents, but the national security and U.S. Department of Energy facilities located here.”

“Through the WIFIA program, the city obtained an interest rate of 2.08 percent on the loan, which matures in May of 2057,” City Finance Director Janice McGinnis said. “The estimated interest savings from the use of the WIFIA loan compared to comparable market rate financing options available to the city is $7 million on a gross saving basis.”

The project includes new raw water intake pumps and traveling screens, rehabilitation of the existing finished water tanks, a new finished water pump station, and water pipelines in addition to the new 16 million-gallon-per-day ultrafiltration membrane treatment plant. These modern facilities will replace the existing 80-year-old conventional treatment plant, which is currently at capacity and beyond its useful life, the press release said.

The new plant will be built near the city’s water intake on the Clinch River in south Oak Ridge.

“Utility infrastructure upgrades are absolutely essential for Oak Ridge,” Oak Ridge Mayor Warren Gooch said. “Shortly after becoming mayor, I recognized that our city needed a new water plant. The WIFIA loan was awarded as a result of the hard work of the city manager and his staff, and it provides our community the most affordable option possible for long-term funding of a new plant. The quality of water for our citizens will improve even more, and the new technology will provide efficient, reliable, and long-term utility operations. This is a major step forward in addressing a critical need for the future of Oak Ridge.”

The press release said deterioration is outpacing the city’s ability to repair the existing water treatment plant, which is located on a ridgetop inside the boundary of the Y-12 National Security Complex. Some equipment is no longer in production, meaning costly tools and pieces must be custom-made when replacement is required. Erosion and seismic activity have also taken a toll on the building and the hillside below. After a thorough cost-benefit analysis, the Oak Ridge Public Works Department recommended that a modern facility should be built. The new treatment plant will provide enough capacity to meet the city’s water needs by continuing the production and delivery of safe drinking water to customers, the press release said.

Established in 2014, WIFIA is a program offered through the U.S. Environmental Protection Agency. The City of Oak Ridge applied for the loan and was the smallest city selected in the category for populations over 25,000. Other participants in the program include the City of San Diego and the City of Baltimore.

The loan was also announced by the EPA. The EPA said project construction and operation are expected to create 135 jobs.

More information will be added as it becomes available.

You can contact John Huotari, owner and publisher of Oak Ridge Today, at (865) 951-9692 or [email protected].

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