Chattanooga awarded $30 million low-interest loan for wastewater infrastructure improvements
Tennessee Gov. Bill Lee and Tennessee Department of Environment and Conservation (TDEC) Commissioner David Salyers announced a $30 million low-interest loan for wastewater infrastructure improvements for Chattanooga, according to a news release.
“We are pleased we can assist local communities with important infrastructure improvements,” Lee said. “Low-interest loans directly address needs and will improve quality of life.”
Chattanooga was awarded a Clean Water State Revolving Fund (SRF) loan as part of the city’s efforts to improve the wastewater collection system. The city will construct three 10 million gallon equalization basins designed to hold back large volumes of wastewater generated during large storm events. This helps the city prevent overflows from the treatment plant entering into streams during periods of high rainfall. The loan has a 20-year term with a 1.17 percent interest rate and will complement existing efforts to improve critical infrastructure and protect human health, safety, and water quality.
“Water and wastewater infrastructure is a critical need for communities,” Salyers said. “The low-cost loan program is an excellent financial tool for helping ensure our water resources are preserved for future generations.”
The $30 million loan for Chattanooga was part of a total of $33 million in drinking water and wastewater infrastructure improvement loans announced, with the City of Dyersburg receiving $2.5 million to improve its wastewater collection system and the Town of Oliver Springs receiving $500,000 to address severe water loss issues through its water infrastructure system.
Through the State Revolving Fund Loan 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.
This fiscal year, TDEC has awarded $85,000 in drinking water loans and $33 million in clean water loans to meet the state’s infrastructure needs. During fiscal year 2019, TDEC awarded $13,430,300 in drinking water loans and $83,194,500 in clean water loans for a total of $96,624,800 to meet those water infrastructure needs. Tennessee’s Clean Water State Revolving Fund Loan Program has awarded more than $2 billion in low-interest loans since its inception in 1987. The state’s Drinking Water State Revolving Fund Loan Program has awarded more than $300 million in low-interest loans since its inception in 1996.
TDEC 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.