Credit loosens for utility
Competition has emerged for utilities looking for loans to extend water pipes.
That was revealed Tuesday during the monthly meeting of Marshall County's Board of Public Utilities (MCBPU).
The utility's chairman assigned two directors to compare the cost of money and other requirements for federal funding and a loan from the Tennessee Association of Utility Districts (TAUD).
Hardly a month goes by that the county-owned water utility isn't approached by a resident asking for water service. Some months, there's a delegation. This month a Milltown resident approached the board with his request.
Waterline extensions are almost always paid for with borrowed money. The Obama Administration's economic stimulus program includes an offer to have the federal government pay 45 percent of the cost of interest payments for public works projects' financing through revenue bonds.
Last month, Lewisburg-based attorney Bob Binkley told the MCBPU that he thinks its staff ought to "crunch numbers" to see if a provision in the American Recovery and Reconstruction Act (ARRA) could provide financing at a lower rate than other avenues of funding such the U.S. Department of Agriculture and the Department of Housing and Urban Development.
This month, MCBPU Superintendent Tommy Whaley provided one view of ARRA funding. The stimulus money may offer a cost for borrowed money that's a little lower than other methods of funding.
However, Whaley says, John Hall of the Murfreesboro-based Flexible Finance Program for the TAUD, has asked whether the stimulus program may be more complicated than it's worth.
"He's scared there may be too many strings" attached to the money, Whaley said of Hall.
Furthermore, there's concern that federal auditors may be so strict when examining financial records that issues will be "black or white," the superintendent said.
"If you bought this bolt" with stimulus money, he said to illustrate the concern, "then it better be used for that project."
County Commissioner Mary Ann Neill, an MCBPU director, asked how quickly the project must be ready for funding.
Stimulus money was rushed to state and local government projects that were "shovel ready," according to national reports. State Sen. Bill Ketron, who represents Marshall County, has reported that the Tennessee Department of Transportation's reconstruction of Mooresville Highway is an example of ARRA funding.
June and December next year are key dates for applications and projects, Whaley told Neill, adding that he'd like Hall to explain the TAUD program to directors.
MCBPU Chairman Rocky Bowden appointed Neill and newly-named MCBPU Director Matt Collins to go with Whaley to Hall's office in Murfreesboro to hear his explanation.
"Go over and find out, and come up with a recommendation on what route to go," Bowden said.
Nearly $1.4 million might be available at a favorable repayment plan through the economic stimulus program, Bowden noted.
Other discussion during MCBPU's November meeting reveals the superintendent's interest in water line extensions that could connect dead ends of pipes that would then be "looped" so there would be a flow of water, thereby reducing the need to flush stagnant water and sediment from the end of a pipeline.
Such connections are good, he said, because a great deal of water is lost by flushing dead-end lines. Furthermore, work on such projects could include repairs of leaky pipes thereby increasing the system's efficiency.
The board also heard reports that environmental regulations are expected to be more strict for construction projects next year so the directors were asked if they'd like to have environmental studies completed before January.
The cost might be $8,000, according to the utility's consulting engineer, Bob Ramsay. But other discussion might lead directors to conclude that getting approval from state and federal regulators may prove to be time consuming as the holiday season is starting.