Local News
Board seeks loan to cover debts
By Patrick McCreless
PATRICKM@CULLMANTIMES.COM
Due to the loss in revenue caused by last year’s record drought, the Hanceville Water and Sewer Board will request a $100,000 loan from Merchant’s Bank to cover various debts.
During a special meeting Tuesday the board agreed to ask for the loan, which if approved, would be added to an existing $300,000 Merchant Bank loan. The board acquired that loan several months ago to cover the balance for a tertiary filter for the Hanceville Wastewater Treatment Plant.
Sally Alexander, co-manager of the Hanceville Water and Sewer Board, said the $100,000 would specifically cover two bond payments, which are due every February and August. The board shares one bond with the city, while the other covers the cost of 13 miles of recently replaced water lines.
“We can easily add $100,000 to our existing loan at Merchant’s Bank to pay off those two,” Alexander said.
Alexander told the board the loan would fill the gap in revenue created by last year’s extreme drought.
“In 2007, our well reached a level of 9 feet and we had to reach an agreement with the city of Cullman to purchase water,” Alexander said.
Typically, Hanceville’s well holds around 90 feet of water.
Alexander said the water purchases, which ended about a month ago, totaled $264,000.
“For a small system, that was a tremendous amount of debt,” Alexander said.
A secondary impact of the drought was Hanceville’s search for another water source. Alexander said the preliminary work and assessment on the new water source cost $223,000.
Though the board does not have the funds now to cover the bond debts, Alexander said that would soon change. She said apart from last year, the board’s water revenue is typically solid.
“Normally, we put in $20,000 to $25,000 in savings every month,” Alexander said. “This will be the first month that we will not have to buy water from Cullman and we will be able to put money back into our savings.”
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