FPU’s Dye requests a companion loan for waterline replacement | News | elkvalleytimes.com

The Board of Mayor and Aldermen approved a resolution for a companion loan for water infrastructure improvements for Fayetteville Public Utilities (FPU) during last week’s October monthly meeting.

Alderman Tonya Allen made the motion to approve Resolution R-2024-18 approving for the companion loan. Alderman Small seconded the motion. Allen, Small, Alderman Jacob Painter and Vice Mayor Danny Bryant voted to approve the resolution. Aldermen Jeff Alder and Roger Martinez were absent.

Earlier in the meeting after Britt Dye, FPU CEO and general manager, gave his report to the board, Mayor Donna Hartman asked him to speak on the companion loan.

“Yes, ma’am. It’s been some time since we got $15.2 million from the SRF (State Revolving Fund) people and we got $7.5 million in forgiveness money,” Dye said. “We got all the paperwork turned in and we met all the deadlines.” He said the state allowed the paperwork to “set on the table for 23 months. By the time we got the first bid in, prices escalated and we only had one bid.” He said the second guy was going to bid, but if he had turned in a bid it would have been double the first bid.

“That’s why we’re asking for a companion loan,” Dye said. He said the work really needs to be done. “We can cut the project back to meet the first loan, but really and truly this work needs to be done.” He said the work includes a lot of fire hydrant replacements and larger waterlines all the way out Mulberry Avenue and around the square. “It will improve everything in the core of Fayetteville,” Dye said. “If y’all let this move forward, that’s the direction we need to move in.”

Information in the SRF loan application states the detail project description as, “Waterline replacement of approximately 83,000 linear feet of aging waterline to improve pressure and reduce water loss.” It also lists the estimated cost for the entire project at $31,300,128, with the requested term of the loan of 20 years.

The original $15.2 million loan was part of $17.8 million in loans from the Drinking Water State Revolving Fund Loan Program to improve water infrastructure previously announced by Gov. Bill Lee and Tennessee Department of Environment and Conservation (TDEC) Commissioner David Salyers. During the announcement, it was reported six loans were approved by the Tennessee Local Development Authority for Fayetteville, the Town of Huntingdon, the City of Etowah and the Cleveland Utilities Authority, totaling $24.3 million.

Fayetteville received a separate loan for $1.8 million from the Drinking Water SRF Loan Program for water treatment plant improvements. The loan has a 20-year term at 2.3% interest. The city received $1.26 million in principal forgiveness with the remainder of the loan amount to be paid back as principal.

Another loan for Fayetteville was $800,000 from the same program for water treatment plant expansion. The loan has a five-year term at 2.1% interest. The city received $250,000 in principal forgiveness with the remainder of the loan amount to be paid back as principal.

BOMA then adopted three resolutions, on behalf of FPU, to approve applications for the three loans.

According to TDEC, regarding SRF interest rates, a community’s interest rate will be based, in part, on their Ability to Pay Index (ATPI). Interest rates can vary from 40% of the interest rate reported to 100% of the interest rate reported on the 20-year, 25-year, and 30-year Bond Buyer Index and the Municipal Market Data General Obligation Yields published every Thursday. Communities that fall within the lower economic scale of the ATPI will be eligible for a lower interest rate, which is where the City of Fayetteville falls.

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