It is a lot of money. Used properly, it can do a lot of good in a community.
It can pay plenty of bills. It can bring long-sought resolution to longlasting problems. It can create opportunity. It can make life a little better for all.
Cleveland Utilities is now a prime example.
For those who have not followed our headlines over the past couple of weeks, the busy public utility has been approved for $10 million worth of low-interest state loans to continue its quest at rehabilitating most of its existing wastewater system. The initiative is called SCOPE 10, an acronym standing for Strategic Commitment to Protect the Environment. It is a vast project that could take up to 10 years, perhaps even longer, to complete.
Total cost of SCOPE 10 is projected at about $30 million although this number could change as well depending on severity of damage to the aging system and the anticipated rising cost of materials.
For the past two years, CU has budgeted about $1.25 million each year to jump-start the expensive — but desperately needed — initiative. The funds so far have come through utility revenue; that is, from its roughly 30,000 customers who rely on CU for water and sewer services.
The forward-thinking utility company is not unlike Cleveland’s average household where family income (revenue) pays incoming bills. As long as paychecks keep coming in, homeowners and renters stay afloat with their expenses. If revenue flow is interrupted — such as by job loss, medical emergencies or other unexpected catastrophes — problems arise.
Cleveland Utilities has a long track record for operating in a fiscally responsible manner in spite of ongoing pressures — especially over the past few years — to stay abreast of demand and to keep up with the community’s unprecedented growth. When new industries and major corporations come to town, it’s great for the local employment base and in many cases it breeds even further growth when suppliers and vendors set up here as well.
But growth is not cheap. And more times than not, it is the local utility company that is most affected.
This points to the importance of an accountable and modern utility, one that watches its fiscal operation as well as its aging equipment and infrastructure.
SCOPE 10 exemplifies the burden placed on responsible utility companies. CU has miles and miles of underground sewer lines. Some have been in place for decades. With age comes deterioration. When sewer lines break and crack, unwanted groundwater seeps into the pipes (this is most commonly referred to as inflow and infiltration). This mass intrusion, especially during extended periods of heavy rainfall, leads to manhole overflows, isolated flooding within the city and, on occasion, sewer backups.
All constitute hazards, both from public safety and environmental health perspectives.
The floodwaters of Labor Day 2011, when parts of Cleveland were deluged with 12 inches of rain within 24 hours, served as CU’s wakeup call. The utility was already involved in a sewer system maintenance program, but the floods two years ago served as notice that a far more aggressive campaign was needed.
Enter SCOPE 10, a comprehensive, expensive initiative that CU believes in the long term will resolve many of the issues connected to its aging wastewater system. The project is costing rate payers a 5 percent hike this year. By comparison, some utility districts across the state have imposed increases ranging from 50 to 300 percent in order to pay for similar sewer system rehab projects that have been mandated by the U.S. Environmental Protection Agency and the Tennessee Department of Environment & Conservation.
CU’s proactive approach with SCOPE 10 deterred EPA and TDEC involvement.
The local utility’s $10 million loan is made possible through the State Revolving Fund Loan program, a resource administered by TDEC in cooperation with the Tennessee Local Development Authority and EPA. The loan comes with a 20-year repayment term at a low fixed interest rate of 1.15 percent. And, $451,022 of the amount represents “principal forgiveness,” meaning it will not have to be repaid. This portion is a TDEC incentive for CU to stay committed to its SCOPE 10 campaign.
As we said, $10 million is a lot of money. But it will do a lot of good.
We urge Cleveland Utilities to spend it wisely and to remain fully accountable — as it has been in prior years — to everyone involved, especially the customers who are paying the rates that will pay back the SRF loan.