Funding for DeKalb Utility District’s proposed water treatment plant has been  approved by USDA Rural Development.
DUD Chairman Roger Turney announced that the water utility will receive a $5 million loan and a grant of $1.25 million to build the new plant at a DUD board meeting last Thursday.
 The loan is set up for 40 years at 2.75 percent interest.
DUD officials say that the additional $4.25 million needed to complete the $10.5 million project will be funded through a bond issue.
The plan is not without opposition, however.
Officials from the City of Smithville fear the loss of almost half-a-million dollars in revenue per year if DUD stops buying water from the city.
The city has hired the Calvert Street Group, a public relations firm, and they have launched a campaign to convince residents through telephone calls, on-line petitions, and other means that the DUD plant will result in large increases in water rates, especially for city residents.
Smithville Secretary-Treasurer Hunter Hendrixson addressed the DUD board at the Thursday meeting, and expressed city officials’ discontent with the project and stressed that city officials can’t understand why the DUD facility is necessary, considering that the city’s newly renovated plant is capable of producing more treated water than both utilities need.
“From the city's standpoint, our plant is a four-million-gallon-a-day plant, and with DUD as a customer we're at 50 percent capacity and have been for many years,” Hendrixson told the DUD board. "Our contract with you doesn't expire until Dec. 31, 2013.
“The city would have been open to renegotiating the contract,” he continued “I just wish the DUD and the city could have had a little better communication.
“I think the city sells water to you very cheaply. I'd say it’s basically a break even. We're not making a fortune off of it. I'd just like to ask the question, why build a plant?” Hendrixson concluded.
Turney said that the plant is being built to allow DUD to be more independent and better able to serve the community in case of emergency.
“One of the reasons is to be able to control our own destiny, to determine where we can go and where we can't go," Turney said. “Over the last several years, several things have happened worldwide that have made it imperative that whenever possible, it makes good sense for areas to have backup water supply systems.
“Look what happened in Nashville just a few years ago,” he continued. “They were hit by a 100-year flood. They came so close. If there had not been interconnections between other utility districts around them, Tennessee would have had an unmanageable disaster.
“We think its beneficial for the whole county, Smithville, our customers, and everyone to have a second treatment plant because who knows what could happen?
Turney also suggested that if local utilities do not claim the water rights they will eventually go to utilities outside DeKalb County.
“Cookeville and other areas want more and more water all the time. We looked that over and decided if we don't get in line and get our piece of the pie in reserve, it may be gone. If we don't do this now, 10 years from now we may say we want to build a plant, and the Corps of Engineers could say I'm sorry there's no water allocated for you and you can't do it. That could well happen.”
Turney also admitted that a rate increase  was inevitable, but said that it would not be as extreme as some people believe.
“We are honestly not doing this to try to punish Smithville, and we're not dumb,” he said. “We realize it’s going to cost a little bit and our customers will have to pay a little bit more because of this initially. But we've had at least three different organizations look at our finances and look at the projections for what's going to happen over the next few years with the assumption that the rates of Smithville (to DUD) continue to increase about five cents every year.
“Everything that's come back to us has said that in terms of our customers, in the long run they will benefit financially. Their rates will be lower, because we will have more control,” he said.
“There's been a tremendous amount of misinformation given out here recently," Turney continued. "No where along the line have we talked about going up 50 percent on our rates.
“We had to justify and show to the state the potential income to pay for these loans and grants. They don't just give you the money on your word. You have to verify it with documents. At our last board meeting, we projected a seven percent increase this year, next year, and the next year. Three years running. That seven percent will be enough to pay for the water treatment plant. Our minimum bill now is $17.50. It will go up to $19. It will then go up to $20.30 and then to $21.75 over the next three years.
“We also figured our average customer's bill is now about $44. That will go up to $47.75. The following year, it will go up to $51.08 and then the following year to $54.55. On the minimum bill, that's $4.25 over four years. That's not even one cell phone call. That's insignificant in the times that we're living in. We're not talking about major income hardships on anyone,” Turney said.
Turney also said that another treatment plant in the county would help attract business to the area.
“We know that most industries like to have backups because if something happens to the water treatment plant that supplies them water, if they shut down, they lose,” he said. “They love to have a backup. That would be a benefit.”
When Hendrixson asked him if the DUD had plans of expanding into other counties, Turney replied that it was a distinct possibility.
“I know Rutherford County would give anything in this world if they could tie into Center Hill Lake. We're less than a half a mile from their water lines,” he said.
“The City of Woodbury, their water supply source is dwindling, going away. We're positioning, that if we had a water supply for them, they could tie on,” he continued.
“We've wanted to serve Alexandria for years. We could tie them on. It may be a long time down the road, but I could see Dowelltown and Liberty. Eventually, they may want to tie on. I think there is potential for growth," said Turney.
A new Raw Water Intake, Raw Water Transmission Line, Water Treatment Plant and distribution system improvements will be built with Rural Development funds.
The treatment plant will be built near Holmes Creek Road in the Yolanda Hills Drive area.
It will have a capacity of three million gallons per day.
The intake will be on Center Hill Lake, the Transmission Line along Holmes Creek Road and distribution lines will be placed along Wheeler Lane, Allen's Chapel, Game Ridge, Turner, South Tittsworth, and Big Rock Roads.