Boone Town Council Officially Approves $12M in New USDA Loans for Water Intake Project

Published Friday, September 30, 2016 at 11:47 am

By Jesse Wood

At a special meeting on Wednesday, the Boone Town Council officially approved two news USDA loans totaling $12 million for the water intake project near Todd, Town Clerk Christine Pope confirmed on Friday.

In August, the Boone Town Council gave town staff the go ahead to seek out the new loans after learning that the project is now estimated to cost nearly $42.3 million – as opposed to the $25 million town voters approved in a bond referendum in 2008.

The town accepted a USDA loan in the amount of $20.5 million to finance the project in 2010. The project has faced a plethora of obstacles and hurdles along the way. So far, the town has spent about $4.1 million on property and easement acquisitions and engineering and legal fees, Town Manager John Ward told High Country Press earlier this summer.

As recently as December 2015, WK Dickson, the engineer hired by the town for the project, submitted to the USDA a total estimated cost breakdown of just over $30 million. This summer, construction bids on the four divisions of the project – even after some negotiation – came in incrementally higher than what WK Dickson recently estimated and what voters approved in 2008.

The most expensive line item on the intake project, which will be capable of drawing 4 million gallons of water per day out of the South Fork of the New River, is the 63,000-foot transmission line that will bring the water from the proposed intake in Todd to the town’s water treatment plant in Boone.

The motion to approve final loan conditions for the intake project and related documents was approved in a 4-1 vote with Council Member Loretta Clawson providing the loan nay vote.

For the past few years now, Clawson has been voicing her objection to the intake, its rising costs and questioning whether or not the state will take it over once it is built, leaving the town with the bills but not the water. She’s also questioned the need for this project in general.

“This is mind-boggling to me,” Clawson said last month.

Clawson reiterated her concerns on Wednesday, according to the Watauga Democrat, which also quoted Councilwoman Jennifer Teague as saying, “We need the water. Boone is going to continue to grow.”

The two 40-year revenue bond loans, which have a 2.25 percent interest rate, are good for $4,544,000 and $7,456,000.

The Watauga Democrat also reported that the project won’t break ground now until early 2017.

See the entire motion from Wednesday below and see meeting packet info here for related docs and more facts, figures and estimates.

Motion: To approve the following final loan conditions, loan documents, and related documents and authorizations, and to authorize the mayor and town clerk to execute the same on behalf of the Town:

  1. Amendment #4 to the original Letter of Conditions dated Sept. 14, 2010;
  1. Letter of Intent to Meet Conditions;
  1. Loan Resolution and Request for Obligation of Funds authorizing and providing for the incurrence of indebtedness for the purpose of providing a portion of the cost of acquiring, constructing, enlarging, improving and/or extending its potable water supply facility to serve an area lawfully within its jurisdiction to serve totaling $4,544,000;
  1. Loan Resolution and Request for Obligation of Funds authorizing and providing for the incurrence of indebtedness for the purpose of providing a portion of the cost of acquiring, constructing, enlarging, improving and/or extending its potable water supply facility to serve an area lawfully within its jurisdiction to serve totaling $7,456,000;
  1. Amendment #5 to the Owner-Engineer Agreement between the Town of Boone and W.K. Dickson;
  1. The Resident Project Representatives Inspection Plan;
  1. USDA Form RD 400-1 US Department of Agriculture Equal Opportunity Agreement;
  1. USDA Form RD 400-4 Assurance Agreement; and,
  1. Any other documents that are necessary for the Town to obtain the approved financing for construction of the raw water intake project.

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