The West Virginia Infrastructure and Jobs Development Council funding committee approved a low-interest loan for the project that would extend and replace sewer pipe in the Kanawha Two-Mile, Chandler Drive and Sugar Creek areas.

However, city officials worry the sewer project could hit a roadblock when the city's loan request goes before the entire council next week. 

"I think we'll have opposition Wednesday," said Larry Roller, director of the Charleston Sanitary Board.

For weeks, Infrastructure Council members have debated a proposal that would limit public financing of water and sewer projects across West Virginia.

The change would require larger municipalities, such as Charleston and Huntington, with lower utility rates to secure private financing for water and sewer projects.

"They want us to raise rates, and then we'll qualify? It doesn't make sense," said Charleston Mayor Danny Jones. "Urban areas shouldn't be penalized for being urban."  

Charleston's sewer project would separate sewage and storm-water pipes. The combined pipes frequently overflow during heavy rains.

"This is our top priority," Roller said. "It improves our system and reduces overflows. It's a good project."

No one has argued against the need for the sewer replacement. It's how Charleston intends to pay for the project that has divided Infrastructure Council members.

Board members, such as state Water Development Authority Director Chris Jarrett, say larger cities are taking advantage of low interest-loan programs - the state Clean Water and Drinking Water revolving funds - leaving little money for smaller water and sewer boards that can't afford to finance projects in the private bond market.

Jarrett has said his plan would free up an estimated $100 million for cash-strapped utilities to improve water and sewer service.

Jarrett wants to require larger utilities to seek private financing for projects, if they charge less than $35 per 4,000 gallons of water or sewer use (or less than 1.5 percent of the median household income in the service area).

Jarrett reiterated the council's position during Friday's committee meeting in Charleston. Jarrett serves as the finance committee's chairman, but did not vote.

"There have been exceptions in the past, but the general rule is $35 and 1.5 percent [median household income], and obviously, Charleston doesn't meet either of those," said Jarrett, who declined to say how he'll vote on the project Wednesday.

Roller and officials at larger water and sewer boards say the council's proposal penalizes well-operated utilities that keep rates low. They predict the change would delay water and sewer projects and force customers to pay higher rates. 

Infrastructure Council members who oppose Jarrett's plan believe the change would lead to fewer projects being funded.

Earlier this year, the Charleston Sanitary Board applied for a $20 million low-interest state loan for the sewer replacement project. The Infrastructure Council approved a $10 million loan, and told the city to secure the rest of the money in the private bond market where interest rates are significantly higher.

Since then, engineers have recommended that the Sanitary Board expand the project - to add sewer pipe and serve more customers. The change increased the project's cost to $25.8 million.

"We discovered additional work we needed to do," Roller said. "We are under obligation to remediate those [sewage] overflows."

Jones plans to speak before the Infrastructure Council votes Wednesday.

"We're going to work hard to make this project happen," he said.

Reach Eric Eyre at erice...@wvgazette.com or 304-348-4869.