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Discussion regarding mitigation credits for the Meadow Park Lake dam project
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SUMMARY: At the September Council meeting, Council directed the City Clerk to place this item on the November agenda for discussion and action.
The following were points of discussion regarding the mitigation credits at the September meeting:
1. The price for mitigation would remain the same if either the City or the Water Authority paid for their out-of-pocket costs of approximately $300,000.00.
2. UT would like to have a verbal commitment prior to October 15, 2026.
3. If the City did not want to continue with this process, then they were in the process of forming a water credit bank where these credits could be sold to other entities at two to three times the cost offered to the City.
4. If the City paid this amount and later decided to not to build the dam that “after the bank became profitable and they started selling the credits, that the City would be refunded the amounts paid”. There is no date or guarantee as to when the repayment would happen. I think it will happen, but it will probably be a few years before the City was repaid.
5. The other bidders, when this project was bid, were approximately $3,000,000 to $4,000,000 more than the UT bid. These other bidders are now actively creating and establishing water credit banks for the sale of these credits that were being offered to Crossville.
6. The cost of these credits has risen sharply since this project was initially bid.
7. If these water credit banks are created, and if the City has no contract with UT or another facility to purchase water credits, then under the rules from TDEC and the Federal Authorities, that the City will be required to buy the credits from any bank that is located in our area. In other words, we will not be free to shop and buy at the cheapest place.
8. UT is interested in negotiating with TDEC to see if the City can self-mitigate by utilizing the wetlands that will be created wh...
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