Recipient: North Stewart Utility District, Stewart County, Tennessee

Amount requested: $900,000

Project description:

North Stewart Utility District has a water treatment plant with a design capacity of 432,000 gallons per day (gpd), using a spring and two wells as the raw water supplies. During the summer of 2006 the District produced 320,000-350,000 gpd from its water treatment plant and purchased 10,000-24,000 gpd from wholesale sources. However, during the summer of 2007 the raw water sources diminished in capacity and the District had to reduce production to 160,000-270,000 gpd and purchase water at a rate of 110,000-190,000 gpd from neighboring utilities. The wholesale utility sources (Woodlawn Utility District and Barkley Lake Utility District in Kentucky) were at maximum capacity and could supply no additional water to North Stewart Utility District. Should the events of the summer of 2007 repeat, the North Stewart Utility District will be forced to enact water use restrictions on its customers.

The only viable long term water source for the North Stewart Utility District is the Cumberland River (Barkley Lake). For the needs of North Stewart Utility District and northern Stewart County, the Cumberland River is an unlimited source and would provide a permanent solution to the water supply woes experienced over the past 10-15 years and the most pressing, the summer of 2007.

In conjunction with the widening improvements to Highway 79, North Stewart Utility District has wisely upsized approximately 7.5 miles of the District’s water line along the highway from the river to the remainder of the District’s service area in preparation to obtaining water from the River.

To complete a project to obtain, treat and deliver water from the Cumberland River will cost the District approximately $5,000,000. To borrow this amount at an interest rate of 4.5% for a period of 38 years would require an annual loan payment of $277,000. An additional payment of the magnitude would require a rate increase of 50%, not considering normal rate increases due to normal increased expenses. A rate increase of this magnitude would mean the average customer, which has a per capita income of $16,302, would have a monthly water bill of $56.51 plus tax. Customers with incomes below the Tennessee average would be seriously impacted by such an increase. To offset such an increase in rates a substantial amount of grant funds will be required. Clean water is a human basic need and a priority of the government.