Pegram approves $2.4M loan for sewer plant expansion

The Pegram Board of Mayor and Aldermen unanimously approved a low-interest loan June 29 to finance a major upgrade to the town's wastewater treatment system, a project officials say will improve reliability and nearly double treatment capacity for future growth.

Alderwoman Miranda Montgomery recused herself from the vote because of her employment with the Tennessee Department of Environment and Conservation (TDEC).

Before the vote, town engineer Luke Sullivan outlined the project during a required public hearing. The town will replace its aging recirculating sand filter system, originally built in the mid-1990s, with a modular package treatment plant after years of operational issues and notices of violation from TDEC.

The project stems from a wastewater master plan completed in 2022 that evaluated multiple options, including connecting to the Harpeth Valley Utility District. Officials ultimately selected the package plant system because it offers more reliable treatment, lower maintenance requirements and room for future expansion.

The new facility will increase the town's permitted wastewater capacity from 36,000 gallons per day to 66,000 gallons per day by adding five new drip dispersal zones and four treatment units. The modular design also allows additional treatment units to be installed in the future if needed.

The project carries a total cost of about $3.1 million, including approximately $691,000 in planning and design costs and a construction contract of $2.41 million.

The construction is being supported by a $691,373 American Rescue Plan grant, while the remaining costs will be financed through a State Revolving Fund loan from TDEC. The 20-year loan carries a 3.31% interest rate and will require annual debt payments of about $164,000.

Sullivan said residents should not experience sewer service interruptions during construction because the existing treatment system will remain operational while the new facility is installed. If financing moves forward as planned, construction could be completed by December.

Sullivan also told the board the project is not expected to result in additional sewer rate increases beyond the town's existing annual adjustment policy. Under a resolution adopted in 2008, sewer rates automatically increase each year by 3% or the Consumer Price Index for water and sewer services, whichever is greater.