Loudon utility seeks loan

Hugh G. Willett knoxnews.com

 

The Loudon Utilities Board will ask the city of Loudon to approve $10 million in revolving fund loans to help pay for $17 million in upgrades to its water treatment plant.

A public meeting is scheduled for April 18 at the Loudon Utilities Board headquarters in Loudon, according to a published notice.

The meeting's purpose is to discuss applying for two $5 million Drinking Water State Revolving fund loans to expand the water treatment plant and raw water intake.

Upgrades to the plant will increase the capacity from 14 million gallons per day to 20 million gallons per day, according to Larry Joe Dockery, pipeline engineer with Jacobs Engineering of Oak Ridge.

Jacobs has been contracted to design the plans for the facility, Dockery said. The total cost of upgrades will be about $17 million, he noted.

Meg Lockhart, Tennessee Department of Environment and Conservation spokeswoman, said Loudon Utilities Board is required to upgrade its water treatment capacity.

"It is my understanding their average daily production was at 76 percent of their treatment capacity. We require upgrades at 80 percent of treatment capacity," Lockhart said.

According to Lockhart, the rule governing upgrades says that whenever a public water system reaches 80 percent capacity based on average daily usage, the supplier of water shall immediately obtain the services of a competent engineer to prepare plan documents for expansion of the system.

According to the public notice, the meeting also is expected to address the upgrade's impact on monthly water bills.

Loudon Utilities Board General Manager Lynn Mills was unavailable for comment. Mike Lambert, finance manager for the utility, said he could not comment about the effect on ratepayers.

Lenoir City Utilities Board recently faced a similar water treatment challenge. The cost of a state-mandated upgrade of the water treatment capacity has been estimated at up to $12 million. LCUB has been under a Tennessee Department of Environment and Conservation commissioner's order to increase its wastewater treatment capacity.

In 2007, LCUB announced a major rate adjustment that would have increased the cost of water and wastewater treatment for business and residential customers 33 percent by this year.

One of the reasons given for increasing the rates was the need to make payments on a $13.5 million state loan to build a new wastewater treatment facility.