CLARKSVILLE, TN (CLARKSVILLE NOW) – The City of Clarksville recently borrowed and repaid $11.5 million from the water fund for a short-term need related to the city’s capital projects.

In response to questions from Clarksville Now, the city said the loan was necessary due to a 4- to 5-month bond issuance process. They sold the bonds on Oct. 14, and paid back the water fund the $11.5 million, plus more than $47,000 of interest, on Oct. 15.

When asked why they had to borrow the $11.5 million from the water fund in the first place, City CFO Christen Wilcox said while capital projects were approved in previous budgets, the city strives to be good stewards of taxpayer funding and not borrow money until the project is completed.

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“This saves the city money on interest payments for assets (in this case, roads) that are not yet complete for residents to utilize,” Wilcox told Clarksville Now. “This method has proven effective in saving the city money over the last several years.”

Wilcox said that this year, however, several of the larger street projects were executed on a shared-cost, reimbursement basis with the Tennessee Department of Transportation (TDOT).

“This means the city must first pay the full project invoices before requesting reimbursement from the state. In some instances, the reimbursement process on both the city and the state side, can take three or more months. Over 75% of the $11.5 million short-term loan was needed to cover funds due to the city from the state in these project reimbursements.”

The borrowed money was specifically used to cover expenses related to various projects such as the Rossview Road improvements, Red River Pedestrian Bridge, as well as adaptive signal controls, Wilcox said.

With Clarksville Gas & Water looking to create a new board, Wilcox said the city’s ability to borrow from the water fund in the future would be governed by the legal framework and charter established for that board.

The $11.5 million interfund loan was approved by the Clarksville City Council during their regular session meeting on Sept. 4, and also by the Tennessee Comptroller of the Treasury office, Wilcox told Clarksville Now. Approval from both is necessary for any borrowing undertaken by the city, she said.

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