The City of Radford is mulling the possibility of financing the $2.6 million hydroelectric dam refurbishment project rather than using reserve funds to pay for it.
On Monday, Radford City Council approved a resolution authorizing the exploration of the bond market for financing for the project. The resolution does not approve the use of financing, which would require additional approval from council.
According to Mayor Dr. Bruce Brown, a favorable bond market and the size of Radford’s reserves led to the decision to look into debt service.
“Instead of draining the pond on our liquid assets, we’re going to investigate the bond market and see what the possibilities are,” Brown said Tuesday.
The city’s electric fund reserves are below the 10 percent generally accepted for municipal reserve funds. Brown said the $2.6 million debt could likely be paid off in five years, partially due to the power created by the updated hydroelectric dam.
“The new turbine is more efficient and more effective,” said Brown.
The dam was damaged in August 2014 and needed a new turbine along with other repairs. City council approved the repairs, which are being completed by Hydro Consulting and Maintenance Services, last May.
At the time, Brown said the cost of decommissioning the dam, which includes removing the entire structure and returning the river to its natural state, would have been just as costly as the repairs.
Radford has been operating the Little River Dam since 1933, with about three percent of the city’s electricity needs produced annually by the renewable energy source. The city saves about $367,000 a year in the cost of wholesale power by operating the dam.
Also on Monday, city council scheduled two public hearings for the March 13 council meeting; one for updates to the city zoning code and one for a possible right of way vacation for property on Tyler Avenue.
Council also approved several appropriation ordinances of grant funds to the Department of Social Services.
The next city council meeting is set for Monday, March 13 at 7 p.m. in city council chambers, located at 10 Robertson St.