(Source: Ben Montgomery The Decatur Daily, Ala. (MCT) — The Athens City Council has approved the application for a State Revolving Fund loan that will pay for a proposed $4 million upgrade to Athens Utilities’ water treatment plant, which leads some residents to be concerned about the city’s debt.
Athens resident Jerry Hill said he is concerned the council isn’t taking the city’s debt, which Hill estimates to be about $42 million, seriously. The council did not dispute Hill’s figure.
“I think everyone on this council is taking it seriously,” council President Jimmy Gill said.
Hill used Jefferson County as an example of what he saw as debt management gone out of control. Jefferson County filed the largest U.S. municipal bankruptcy in U.S. history in September.
“I figure people in Jefferson County were comfortable with their debt until it was too late,” Hill said.
SRF loans are through the Alabama Department of Environmental Management. ADEM claims the loans’ interest rates are usually 1.5 to 2 percent lower than most municipal bond rates. The SRF loan Athens is applying for will be paid back over 20 years at a cost of $288,000 per year. Another SRF loan already in effect in the city is paying for the $2.7 million construction of trunk sewers and water lines in the French Mill Creek and Piney Creek subdivisions. A $970,000 federal grant is also paying for that project.
“I don’t know how you could ever retire your debt without making improvements,” Councilman Harold Wales said. “I don’t think this city could ever be debt-free.”
The $4 million project includes replacing old treatment plant filters that just barely meet the requirements for reducing the amount of chlorinated hydrocarbons in the water. Hydrocarbons are small particles of plant matter that are harmless by themselves but react with chlorine to form a substance that has been linked to cancer.
Council members said the plant was built in 1965 and many parts of it have not been updated in years.
“We’re trying to maintain a system that’s wore out,” Wales said.
©2012 The Decatur Daily (Decatur, Ala.)
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