Aldermen heard a proposal Thursday night to borrow $4.5 to $4.2 million to expand water and sewer services and renovate existing lines.

     The areas targeted for expansion include Deer Run Trail, Oak Hill Drive and Moreton Estates.

     An increase in water and sewer rates would be required to pay back the loan, though by how much and who would be affected by increases remains undetermined. Mayor Les Bumgarner suggested the city consider lowering property taxes to offset utility rate increases.

     Mike McKenzie, of Williford, Gearhart & Knight, outlined a number of key proposals for aldermen related to sewer and water services.

     McKenzie referred to a map used in the city’s annexation hearings of areas to receive city water and sewer services. Most of those areas remain without such services, and his proposals would begin an expansion of such services.

     Under his proposal, Deer Run Trail would have 12 houses added to city water and sewer lines. Oak Hill Drive would have 13 houses added to city water services. Forty houses in Moreton Estates would be added to sewer and water services.

     In Lakewood Subdivision, city sewer lines would pick up 40 residences. On Crooked Lane, the city would add 40 houses to sewer and water services.

     County Club Road would have 30 houses added to city sewer lines. Forty-five houses on Brignall Road would be added to city sewer lines.

     McKenzie also proposed $1 million be set aside to rehab the worst areas of existing lines.

     The city would need to borrow approximately $4.5 to $5.2 million to undertake the projects. Total repayments on such a loan could reach from $22,500 to $26,000 a month for 20 years.

     Loan repayments must come from the water and sewer funds; general operating funds cannot be used. Therefore, utility rate hikes would be required to fund proposed expansions.

     The additional revenue generated by the additional connections would total approximately $7,000 a month, according to McKenzie’s estimates.

     Bumgarner’s suggestion of a 10 percent property tax decrease was offered as a way to offset utility rate increases.

     “We’ve got to do this, and it may mean we have to tighten up,” said Bumgarner, who suggested the county and school districts take similar actions regarding property taxes.

     State loan programs are available to fund line projects, but aldermen would need to decide whether to take action within the next 45 to 60 days if they want to be considered for 2013 loans.

     If this window passes with no decision, McKenzie said the city wouldn’t be able to receive the loans he’s suggesting until 2014.

     McKenzie also reviewed selections of camera footage filmed in city sewer lines. McKenzie highlighted areas in which sewer lines are badly cracked and leaking groundwater into the lines, as well as several sections with large holes.

     The review contained footage filmed in lines on Union Street, Highway 51 south and in lines behind the downtown Piggy Wiggly, which feature extensive grease deposits.

     McKenzie told aldermen rehabbing 50 percent of the existing lines within the city would cost approximately $7.3 million.