City forgives loan to water/sewer fund to be approved for USDA loan

SALUDA — The city of Saluda forgave its own loan this week in order to get approval from the United States Department of Agriculture for a loan.

The Saluda Board of Commissioners met Monday and approved a resolution to forgive a loan from the general fund to the water and sewer enterprise fund.

The original loan from the general fund was for $150,000 on Feb. 29, 2016. The loan was made to replace the sewer discharge line from the Laurel Drive lift station to the manhole at the corner of U.S. 176 and Ozone Drive.

City Attorney Jana Berg said she prepared a resolution to forgive the loan, which will enhance the city’s ability to secure the USDA loan.

Saluda is receiving a loan for over $2 million to complete 11 water and sewer projects.

“The city loaned the enterprise fund $150,000 to run force main from Laurel Drive to the 176 intersection,” said Saluda Mayor Fred Baisden. “We are allowed by the state to forgive that loan.”

The balance of the loan as of Oct. 31 was $74,840.

“The city of Saluda is currently pursuing a USDA loan to expand its sewer system,” states the resolution. “Whereas, the city would be better positioned to be approved for the USDA loan it seeks if the city’s water and sewer enterprise fund were not encumbered by the loan from the city’s general fund.”

The resolution also states that by forgiving the loan, the water and sewer fund will be able to explore replacing its maintenance shop, which was recently flooded with sewage after severe flooding.

Saluda is currently trying to borrow almost $200,000 more from the USDA to complete its 11 planned water and sewer replacements. Bids for the project came in too high, so one project was deleted and the city is awaiting word from the USDA if it can borrow more than the $1.9 million it was previously approved for.