By Tabitha Evans Moore
EDITOR & PUBLISHER
LYNCHBURG, Tenn. — The Council voted on Monday to approve a resolution allowing the Metro Utility Department (MUD) to borrow up to $1 million to replace aging galvanized water lines in town.
The 20-year loan comes through the Tennessee Municipal Bond Fund. It is structured as a draw loan, so the department pays interest only on what it uses. The loan will be repaid from water revenues. Because the metro government guarantees it, the council had to approve it.
Council members were told the old galvanized lines must be replaced by 2034, and that the MUD Board chose to start now rather than wait. The lines run through Chapman Acres and around town, where there are “massive water leaks,” according to MUD Manager Ronnie Cunningham.
ABOUT 3,000 FEET OF PIPE
Cunningham told the council the loan would cover about 3,000 feet of line. Existing 2-inch galvanized pipe would be replaced with 6-inch and 4-inch lines. The department plans to put the work out for bids. It usually seeks three or four bids but does not know how many it will receive.
The leaks are hard to see from the surface, Cunningham said — explaining that new meters pick up the sound of water escaping at galvanized lines along Main Street and elsewhere in town, but “none of that water’s coming from the top to ground.”
Asked whether customers would see higher rates, Cunningham said, “We aren’t raising the water prices.”
“The water loss should pay for it,” council member Peggy Blackburn added.
The system’s overall water loss is about 39% countywide, Cunningham said. Council member Regina Adcock asked how much of that the project would fix and whether the department had done an analysis. The answer given was “about ten percent.” Cunningham said the department has not identified all its losses because many county meters are not read until the end of each billing cycle.
Engineering and design are underway, and no cost estimates had been received as of Monday, the council was told.
It passed by an 12-1 margin with Golden, Bracewell, Cashion, Blackburn, Bobo, Dye, Shane Taylor, Regina Adcock, Brady Goodwin, Jayson Estfon, John Oosting, and Brandon Ross voting in favor. Sunny Rae Moorehead voted against the motion. Payton Keller and Douglas Carson were absent from the meeting.
LOAN TERMS AND A DEBT-POLICY CHANGE
Information in the council packet showed an indicative fixed rate of 4.81%, locked for five years at a time. If the full $1 million were drawn at closing, payments would run about $79,000 a year through 2046. The loan cannot be prepaid during its first five years.
Before the loan can close, the initial resolution must be published once in a local newspaper. That opens a 20-day protest period. After it ends, the loan goes to the state Comptroller’s Office for approval.
In a related vote, the council amended the county’s debt management policy to allow “heightened risk debt.” A state law passed last year puts loans like this one in that category because the bank can change the rate or call the loan at each five-year mark. Mayor Stewart that the heighten risk debt policy already exists at the Tennessee Comptroller level and the passage of it locally merely added to our local guidelines.
The Heighten Risk Debt policy passes unanimously.
The Metro Council meets on the third Monday of each month at 6:30 p.m. at the American Legion Building off Highway 129. There is a designated public comment section at the beginning of each meeting. To be added, contact Metro Mayor Stewart’s office at 931-759-7076. •
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