The Manchester Board of Mayor and Alderman approved during the June 2 meeting two resolutions that will authorize the sale and payment of $20 million in bonds for Water and Sewer Department related repairs.

The $20 million will be borrowed in two phases, $10 million at a time, over the next several years. Interest on the monies is estimated to be at 4.25% and will be paid back over 30 years.

The monies will be split three ways, with 70% going to water and sewer infrastructure improvements, 15% water supply upgrades and 15% will go to repairs at the wastewater plant.

These projects will help the city continue repairs to the sewer system that are part of the plan of action that the city provided to the Tennessee Department of Environment and Conservation in response to a consent order stemming from excessive manhole overfl ows from inflow and infi ltration (I&I), according to Mayor Joey Hobbs.

“Before we spend a dollar we will be bringing it back to the board for you guys to sign off on every dollar we spend,” Hobbs said.

Vice Mayor Mark Messick said that taxes in the city are not going to go up due to the bonds.

Financial adviser Scott Gibson, Senior Vice President of Cumberland Securities said noted that while the city is in a sense “cosigning” the loan for the water department, state law prohibits any city money from going to fund the water department.

He said that the bond is being handled slightly different from the current water department bond. Rather than issuing a general obligation bond, this bond will be issued with a pledge first from Water and Sewer revenues.

This method would show to rating agencies that these monies are all for water and sewer. The “and tax” clause is a “co-signature” by the city to impart the Water Department the favorable credit rating that the city has, according to Gibson.

County resident and activist Sarah Bradley asked the board to differ the matter at least until a special call meeting on June 16 to seek a state loan from the state.

“One of the things that make me nervous about this 20 million bond is we don’t have I haven’t seen and I don’t believe you have seen, a plan for how that is going to be spent,” she said.

Due to the fact that lower interest loans are available through the state revolving fund… the max we would pay is 3.18%,” she said.

Gibson said, however, RSF loans applications are accepted in the fall. Those applications would be graded in the winter according to priority and would delay sewer projects until 2028.

The city’s I&I issue would be viewed as a low priority, according to Gibson.

“Typically, I&I projects don’t rate that high. They are looking for issues where people don’t have clean water or where sewer is leaking out of pipes or not getting treated,” he said.

“If you are a high priority project you can get on the list. If you get on in January, hopefully by the next January you would get your funding lined up so you can start construction the following summer,” he said.

The initial resolution required by state law to authorize the issuance of the bonds passed unanimously, while the more detailed resolution establishing the terms, payment and provisions passed 5-1 with Alderman Julie Anderson giving the no vote.