McMinnville officials are rushing to secure a $4 million loan to upgrade the city’s Wastewater Treatment Plant. The deadline to submit the loan request is March 25.
The loan comes from the state and offers the city a low-interest rate, as well as $200,000 in principal forgiveness leaving $3.8 million the city has to repay.
City administrator Bill Brock says the city will be at risk of paying a higher interest rate and will definitely lose the principal forgiveness.
“We have a loan packet that we need to get turned in by March 25,” said Brock. “If we don’t, there are two things that could happen. The interest rate could go up. The interest rate is set on the day the loan is closed, for lack of a better word, when they approve it. When we go past this date, we have been assured we will lose the $200,000 forgiveness. If we don’t get this loan, someone else will.”
His presentation was made during a Water and Sewer Committee meeting held Monday at 6 p.m.
“We need to get this out of committee and to the board as fast as possible. Once it’s approved by this committee and the full board, city engineer Anthony Pelham is going to hand carry it to Nashville. Tim Pirtle (city attorney) is getting his letter ready that needs to go with it. Anthony is getting all his paperwork in order. Everyone is really pushing to get this $4 million loan through.”
Pelham says the city is assured the loan if it can meet the March 25 deadline.
“If we can meet the 25th date, we are assured of the funds,” said Pelham. “The $200,000 is some leftover funds from some past budgets. We would lose that. If we don’t hit this deadline, we will still have the $4 million loan.”
Alderman Mike Neal questioned if the improvement to the facility was state mandated.
“No, sir,” said Pelham. “It is not a requirement today. It is a longstanding capital improvement project that’s been on there for many years. It’s preparing for what we anticipate to be state mandated for the quality of treatment on the sewer.”
Neal stated, “So, we are just trying to keep ahead of a state mandate?”
“Yes, sir,” said Pelham.
No rate increase will be necessary to repay the loan. The rate increase in January 2014, which amounted to a 19 percent increase for city customers and a 30 percent increase for customers outside the city, was sufficient to cover the debt service payments that are estimated to be $256,000 a year.
Committee members Jimmy Bonner, chairman, Everett Brock and Mike Neal approved the loan and sent it to the full board for its consideration.
A special called session of the Board of Mayor and Aldermen is scheduled for Thursday, March 19 at 6 p.m. to consider the loan.