Crossville officials are considering a $300,000 agreement with Tennessee Tech to lock in current pricing for environmental mitigation credits required for the Meadow Park Lake dam project.
City Manager Valerie Hale said the university contacted the city regarding the contract for the dam and asked if officials were interested in retaining the current credit price of $1,400. Hale said if the city does not enter into an agreement, the cost per credit will increase to $3,000 and could rise further if the university sells them on the open market.
“The money could be recuperated if we were to sell the credits later in the future or later, probably be five to six years before that money was actually received, just because of the timeframe that it would take to get those back,” Hale said.
City Attorney Randy York said the university offered to keep the prices in effect for one year if the city pays $300,000 to cover out-of-pocket expenses. York said the total cost for mitigation credits could reach $11.6 million if the city moves forward with the dam project.
York said other entities are currently establishing banks for mitigation credits, which could force the city to pay significantly higher market rates if a contract is not in place. York said the university indicated it would be willing to meet with the council via Zoom to explain the proposal further.
“If we are committed as a community to having a dam through whatever entity it is, then we should think about the cheapest price that we can have,” York said. “And so if we pay the money, like our city manager said, then and we don’t do the deal, then they’re going to establish a bank.”
One council member said he had concerns about making a financial commitment of this size just before an election. The council member said the city is facing two upcoming vacancies on the board and a referendum that will impact the future of the water system.
“I know some of us here at the table have mentioned not making decisions that future councils at least will have to make,” the council member said. “I just I just wish they would wait.”
York said the university requested a verbal commitment by October 15, but he believes they might be willing to wait until November 15. York said the results of the November 5 election and the referendum would be known by that time, though new council members would not be sworn in until December 5.
“It might be best that we try to push this off just a little bit,” York said. “The new council members will be sworn in on December the 5th.”
Hale said she would contact the university to ask if the deadline could be extended by 30 days.
