City of Algood will take an alternative route to borrow funding for its Old Walton sewer project.
City Administrator Keith Morrison said the city was originally using a USDA rural development loan, which is a 40-year loan. He said they recently found a new time of loan funding that will make the project more efficient and shorten the loan period to just 25 years.
“It will give us a little more control over the project and just try to be able to do things in the field a little bit quicker,” Morrison said. “And it’s a draw-down loan so we can draw down on the loan as we need it instead of taking it out of reserve.”
Morrison said this also helps the city because the bond fund allows it to pay off early if it so chooses. Morrison said with the change in the loan type, they also increased the borrowing amount to $2.3 million to cover increased costs.
Morrison said the idea for the bond loan came about from a conference with the Tennessee Municipal League. He said the bond fund is always there with representatives to help with the process.
“They’re run through the state government as a way to find loans and save money, and be able to do projects and things,” Morrison said “And as talks proceeded we kind of looked at this as a viable option and so I took it to the city council and they agreed and felt like it was a good way to go.”
Morrison said another issue that brought up the change is that originally the city would not have to borrow money for the interim and would only use reserves and reimburse with the loan funding. He said now that the city as the ARP grant coming out, they will need the reserves to pay for the sewer rehab project.
The post Algood Making Changes To Loan Type For Old Walton Sewer Project appeared first on News Talk 94.1/AM 1600.