By Katie Northcott, News Director
At its meeting on Tuesday, June 2, the BOMA unanimously passed its FY27 budget on its first reading. The budget will come before the BOMA a second time for final approval at a special called meeting on Tuesday, June 16.
At the BOMA’s budget work session prior to the BOMA meeting, conversation centered around a $20 million bond for the Water & Sewer Department proposed by Manchester Mayor Joey Hobbs. The bond had been recommended for approval by the Manchester Water & Sewer Commission and the Manchester Finance Committee.
“Every little dime will help us get ahead of [state and federal enforcement]. Cause we’re trying to do what we can with what we’ve got,” Water & Sewer Director Lonnie Foley said.
Scott Gibson, Senior Vice President at Cumberland Securities Company, Inc., spoke to the BOMA about the bond. Cumberland Securities is an independent municipal advisory company and will sell the bond on behalf of the City of Manchester.
Gibson estimated that the bond would be sold at about a 4.25% interest rate and would be paid off in about 30 years. Since the city will take out the bond in increments of $10 million, he estimated he would sell the first $10 million bond by July 8. However, interest rates could be affected by changes in the political climate.
“The war [with Iran] starting up again or something like that. If something like that happens, I’ll definitely let [the city] know and call the mayor and say, ‘look, I think we need to wait a couple weeks to sell the bonds and see how this shakes out,’” Gibson said.
In a previous meeting, Hobbs said he had formulated an “aggressive” three year plan to improve the city’s water and sewer infrastructure alongside Finance Director Anthony Burrows and Water & Sewer Director Lonnie Foley. The plan has been submitted to the Tennessee Department of Environment and Conservation (TDEC). The bond will fund the city’s implementation of the plan.
Peterson Media Group submitted an open records request for the plan on Friday, May 29, but the request had not been filled at the time of this article’s publishing.
In a memo addressed to the Manchester Finance Committee on May 19, Hobbs estimated that the bond will be spent as follows:
- Wastewater Treatment Plant Modernization (upgrading outdated mechanical equipment) – 10%/$2 million
- Water Distribution System (upsizing 10-inch and 12-inch water mains to 16-inch and 18-inch lines) – 20%/$4 million
- Mitigation of Infiltration and Inflow (preventing excessive rainwater from overloading treatment plant) – 60%/$12 million
- Macroeconomic Contingency Buffer (ensuring factors like inflation do not inhibit progress on major projects) – 10%/$2 million
In February, TDEC leveled a nearly $150,000 fine against the city for excessive sanitary sewer overflow events. The city has maintained that the overflows are caused mainly by infiltration and inflow (I&I) during rain events.
Gibson praised the city for planning to use the bond funds to target I&I mitigation.
“I do a lot of work across the state,” Gibson said. “I cannot emphasize enough that staying ahead of that game instead of getting behind is very important because if you get behind too far and the EPA shows up and decides to do some steps.”
At the June 2 meeting, Hobbs estimated that a complete rehab of Manchester’s water and sewer system would be a $60 million project. The city is hoping to receive a $5 million grant from the EDA to help fund future projects.
During the public comment period at the BOMA meeting, Coffee County resident Sarah Bradley asked if the city had explored State Revolving Fund (SRF) loans.
According to the state’s website, “TDEC’s Clean Water State Revolving Fund (CWSRF) program provides loans for planning, design, and construction phases of wastewater and stormwater systems. CWSRF provides low-interest, infrastructure loans to cities, counties, utility districts, and stormwater authorities.”
Bradley estimated that the interest rate on an SRF loan would be a maximum 3.18%, which she said could save the city $15,000 per month. She asked the BOMA to defer the approval of the bond until its special called meeting on June 16.
“We don’t have … a plan for how [the bond] is going to be spent,” Bradley said. “I’ve seen the plans we submitted to TDEC for our next rehab. I will go ahead and tell you, that’s wasted money. It’s an upsize, but it’s not enough of an upsize.”
In response to Bradley’s comment, Gibson said that he had discussed SRF loans with Hobbs and Burrows in 2025. However, Gibson recommended against an SRF loan for the I&I mitigation project because he did not think the project would rank highly on TDEC’s priority list. A low priority ranking would mean it could take years to be awarded the grant.
Hobbs said that the city did not have a clear enough plan to submit projects for SRF loans in 2025, but that the city may explore SRF loans as a funding source for future projects as the city seeks to complete a water and sewer system rehab.
The BOMA approved two resolutions authorizing the $20 million bond. The first passed unanimously, and the second passed 5-1 (Alderman Julie Anderson opposed).
