Loan necessary for a new tank

From left, Water & Sewer Commission Chairman Jeff Watson, incoming water director Sean Davis and Director Larry Garrett.

No more grants are available for a new water tank in Huntsville, according to incoming water department director Sean Davis.

“It looks like we’ve exhausted all avenues for grants,” Davis told the Huntsville Water & Sewer Commission at its meeting last Thursday.

The project to purchase a new tank and install it on Governors Hill will cost $1.2 million, Director Larry Garrett said. The city has received a $200,000 grant, but the remaining $1 million will have to come from a loan.

Garrett said the city’s project will get a loan from the United States Department of Agriculture’s Rural Development.

“We have been from the onset of this thing we have been approved for 100 percent loan from Rural Development,” Garrett told the commission.

“This actually states that there would not need to be a rate increase to cover that, based on what our rates will be come January, but I need to confirm that with them before we move forward,” Garrett said.

The City Council at its December meeting is expected to approve a rate increase to offset an increase in price to purchase water from the Beaver Water District. The increase would be 5 cents per 1,000 gallons for water and 3 cents per 1,000 for sewer.

The $1 million loan would be for 40 years, with payback annually more than $30,000, said chairman Jeff Watson.

Garrett said, “I don’t expect we will be into a position to start the bond process until after the first of the year.”

The current water tank needs an estimated $700,000 in repairs. Commissioner Sumner Brashears said, “We’re not going to find a better deal than that, and it’s something we need.”

The new tank will be placed just inside a fence running up Governor Road to the Madison Count Fairgrounds. It will be located in the northwest corner of a field behind where vehicles park during the annual rodeo, Garrett said.

The next step is for Garrett to follow up with Rural Development to check the payback rate and to verify that another rate increase will not be necessary, he said.

In other business last week, Davis and Garrett gave an update on a property on Hall Lane. At the October meeting, Lydia Scates said she and her husband were concerned there was a water leak, which often left their property wet.

Davis said the city tested lines on Hall Lane up to Warren and Dogwood and found one small leak.

“Nothing that would affect their property,” Garrett said.

A couple of test holes at the Scates property found dry soil, meaning soggy ground resulted from rain runoff and not a leak, Davis said.

“I’d rather go the extra mile and do our best to satisfy them,” Brashears said. Davis added, “We want to satisfy ourselves as well.”

Also last week:

• The commission approved a 2020 budget, which has increases in both operating expenses and revenue.

“Our budget for next year’s gone up both in projected revenue and expense and that’s just in regards to the increase for what we’re going to pay for water,” Davis said.

Projected operating expense for 2020 is $2,571,470, up from the $2,460,654 spent this year. Total revenue for 2019 was $2,550,000, with a budgeted increase to $2,628,185 for 2020.

• The commission saw a copy of a new customer extension agreement, where a water customer will pay $50 to extend water and sewer service.

• Garrett discussed the recent theft of a water department truck that was stolen from his house. Garrett said he normally puts the truck keys in his house, but said on this occasion may have left them in the truck.

“Shame on me,” Garrett said. The 2015 truck was found with the city decals scraped off the doors. Three adults were arrested in the case. The truck had to have a new security system installed since the three arrested threw away the keys before they were arrested.

The commission next will meet at noon on Thursday, Dec. 5.

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