published Tuesday, January 8th, 2013

Price tag coming in for Chattanooga sewer work


by Cliff Hightower
Pam Ladd
Pam Ladd
BY THE NUMBERS

$33.1 million: Amount of loan city is applying for to help upgrade sewer system

$14 million: Estimated debt service per year with the loan

$3.7 million: Up-front costs to be paid this year with operating funds

Source: City of Chattanooga

  • photo
    Steve Leach, Chattanooga Public Works Administrator.
    Photo by Dan Henry /Chattanooga Times Free Press.

Chattanooga's first bill is coming in for sewer repairs, and at least $38 million worth of work will begin this year.

The City Council is expected to vote tonight on approving an application for a $33.1 million state loan for sewer repairs and on spending another $3.7 million from the sewer system's operational budget for design work.

"We're starting out heavy to get a lot of these [repairs] done," said Dennis Malone, assistant city engineer.

The money is being spent as part of a federal consent decree ordering the city to spend $250 million to upgrade its 100-year-old sewer system.

The order, handed down last summer, was the result of years of negotiation with the Tennessee Department of Environment and Conservation, the U.S. Environmental Protection Agency and the U.S. Department of Justice.

The city has 16 years to get the work completed; however, the vast majority of it must be completed within the first five years.

Malone said 23 projects will be in the pipeline this year. Thirteen of those are on the council agenda for today, and the rest will be coming before the council at the end of February or beginning of March, he said.

The $33.1 million will be spent on four of the 23 projects. The other 19 projects don't qualify yet because state loans will not pay for design work, he said. The projects have to be in the construction phase.

Steve Leach, administrator of Public Works, said most of the projects, such as a program scheduled to replace and strengthen pipes in East Brainerd, are geared to updating existing infrastructure.

"It's designed to really tighten the system up," he said.

He also said there should be no additional hikes to the sewer fee besides those proposed last year. The 2013 fiscal year budget included a 9.7 percent increase. Part of the hike came in the fall and the rest will come in the spring.

Council Chairwoman Pam Ladd said there will be a special called meeting at 2 p.m. today at the City Council building to discuss the enormous expenditures. She said the council will vet the projects, but on first blush it appears as if the council must agree to the work.

"It looks to me like all of them are appropriate," she said.

Joachim Volz, financial analyst for the city's wastewater resources department, said the projects will be completely funded out of the city's sewer fees. The wastewater system's debt service would go up to about $14 million a year, he said.

But the $33.1 million will not pay for all the projects. The council will look at an additional $3.7 million in projects today, and those initially will have to be paid for out of operating funds. Most of the projects will be able to be funded later by loans, Volz said.

Volz did not have a figure yet on the additional costs that will have to be paid for out of the operational budget the council will see next month.

But he said there would be no problems handling the additional load in the sewer system's budget.

"There's enough money to do that," he said.

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