Lenoir City Utility Board, which supplies Farragut with electricity, could borrow $50 million to pay for a new administrative and warehouse building.
“We chose this particular site because we had the Knox County rate payers in mind,” Lenoir City Mayor Tony R. Aikens, who is also on LCUB, said regarding the new LCUB building’s location off Highway 321, near I-75. He said it would be more convenient than the old one.
“We’d probably cut our response time by a third if not half in some cases,” he said.
LCUB is considering borrowing funds from Public Building Authority of Clarksville working with the Tennessee Municipal Bond Fund. LCUB approved a series of resolutions making it easier to borrow the money at its meeting April 18. The resolutions will next go to Lenoir City Council for approval.
These four resolutions authorize the borrowing of up to $25 million on two different loans. According to the resolutions passed, the debt could be paid back using revenue from Lenoir City taxes and utility payments from LCUB customers. However, LCUB would not raise rates in connection with the construction.
“The board’s marching orders are very clear that, yes, we’re prepared to build a building but we’re not going to have a rate increase as a result of it,” Shannon Littleton, LCUB general manager, said.
Issues involving Standard & Poor ratings may delay LCUB’s borrowing process. Lenoir City is currently seeking an S&P rating for itself.
“We do not have any rating by any organization simply because of the fact we do not have debt,” Littleton said. He said the City currently has a AA rating, but would need to go through the process again to reaffirm the rating and get a new rating for LCUB.
“So there’s several steps here that have to be completed in order for the lending institution to loan the money,” he said.
After LCUB passed four resolutions involving borrowing the $50 million, it approved a reimbursement request for $290.90. This reimbursement covered half the hotel, meal and auto costs for Loudon Economic Development Agency during the International Conference of Shopping Centers.
LCUB members voted unanimously on all of the items. Lenoir City Councilman Mike Henline was absent.
Construction is underway for the new administrative building.
It will be located off Creekwood Boulevard.