By Katie Northcott, News Director
At its meeting on Tuesday, May 19, the Manchester Finance Committee unanimously approved Manchester Mayor Joey Hobbs’ proposal that the City of Manchester take out a $20 million municipal revenue bond for the Water & Sewer Department.
“[T]his funding is vital to meet compliance milestones under our current state and federal regulations, eliminate chronic system overloads, and structurally support Manchester’s residential and light industrial growth,” Hobbs said in an email to the committee.
The proposal has already been approved by the Manchester Water & Sewer Commission with the condition that Water & Sewer Director Lonnie Foley would present a list of planned projects for approval at the June Commission meeting. The bond will now go before the Manchester Board of Mayor and Aldermen for final approval.
Find reporting on the Water & Sewer Commission approval here.
Hobbs said the city had turned in a 3-year plan to the Tennessee Department of Environment & Conservation (TDEC) on how to improve the city’s Water & Sewer infrastructure and that the city will need more money to implement the plan.
Hobbs said that he had formulated the “aggressive” 3-year plan with Foley and Finance Director Anthony Burrows. The plan involved prioritizing the long-term welfare of the city’s infrastructure.
On Wednesday, May 20, Peterson Media Group asked via email that the city to provide the plan submitted to TDEC. The city had not responded at the time of this article’s publishing. The plan has not been presented to either the Water & Sewer Commission or the Finance Committee.
Hobbs did provide the following breakdown in his memo, estimating how the money will be allocated:
- Wastewater Treatment Plant Modernization (upgrading outdated mechanical equipment) – 10%/$2 million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 – 10%/$2 million
Hobbs said that the bond would be taken out in stages to mitigate its financial impact on the city. Hobbs hopes to take out the first $10 million by July 1, 2026. It will be spent in 6 to 12 months. After the first $10 million is spent, the other $10 million will become available. Hobbs is hoping to prevent the city from paying interest on unspent capital.
“As an enterprise fund, the Water & Sewer Department intends to back this debt through utility-generated revenue,” Hobbs said in his memo. “The integration of new tap connections currently expanding in Manchester will add ongoing service fees to reinforce our debt-service ratio.”
Hobbs said in his memo that the city could face state penalties, litigation, or mandated connection bans if it failed to make necessary infrastructure improvements. Hobbs also pointed out that commercial and residential development could be halted if the city’s utility capacity could not support the growth.
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