Rate Hike on Sewer Unlikely
Lower estimated cost of the sewer plant expansion and no rate increase in the immediate future came as good news for the Moore County Board of Commissioners at a recent planning retreat.
Public Works Director Dennis Brobst reported a lower cost estimate for the expansion and upgrade of the county-owned facility at Addor. He also predicted that a rate increase may not be needed prior to completion of the upgrade.
Brobst also shared good news about funding prospects. He said that by the time the county is ready to begin construction, the capital reserve fund should contain about $7.7 million to be applied to that cost. The county also has the prospect of securing a state loan of $24.4 million.
The county is expected to start the bidding process by early 2012.
In recent months, public interest in the wastewater treatment facility improvement has been eclipsed by plans to construct two major buildings in downtown Carthage -- a detention center-public safety complex and a government office building. But the sewer plant expansion is a necessity that has been in the early planning stages for a number of years.
State and federal regulations require owners and operators of sewer plants to initiate expansion plans once the existing facility reaches 90 percent capacity usage.
That is not yet the case with the sewer plant, but usage could climb unexpectedly and has been higher in the past.
"And Camp Mackall may grow significantly," said County Manager Cary McSwain.
At present, Camp Mackall is among the smallest users of the sewer plant, but Fort Bragg is likely to increase its use of the sprawling training ground near the Moore-Richmond County line in the near future with the expansion of the military based as a result of BRAC (Base Realignment and Closure Commission), which is expected to mean widespread growth for the Fort Bragg area, including Moore County.
Estimated cost of the sewer plant expansion has dropped to $32 million. At one time, the estimate was above $40 million, then fell to $37.8 million.
Brobst said that several items originally included in the plan are no longer regarded as necessary and have been removed, resulting in the lower cost estimate.
With these new estimates comes the prospect that a rate increase will not be needed at least until the expansion is complete.
"I would like to wait till construction costs are known, and then we'll have a picture of debt service," Brobst said. "Unless I get a significant change, I see no need to plan for a rate increase until it's needed."
Brobst said he has prepared a draft contract for each municipality with the figure based on cost per thousand gallons, just as the county has operated in the past.
Under contracts with each participating entity, the county charges a base sum for this service. Then it is up to the municipality to set the fees for billing individual customers.
"It's not the county's job to determine the fees that the towns charge their customers," Brobst said.
The plant, built in the late 1970s, was designed to serve Southern Pines, Pinehurst and Aberdeen, with those municipalities assuming responsibility for debt service. Since then, service has been extended to Pinebluff, Carthage and Camp Mackall and other outlying areas. Initial cost was covered by federal and state grants and low-interest loans. However, few grants are now available to support such projects.
Built with a capacity of 6.7 million gallon a day, the plant now averages usage of 4.7 million gallons daily.
In his report, Brobst also gave an update on Phase 2A of the East Moore Water District. Now 90 percent complete, it has added about 71 customers and has a total cost of $296,000.
As for the third phase, more than 800 letters have been sent to prospective customers, and Brobst said 400 responses have already been received. This response was described as better than the response from Phases 1 and 2.
"We are reviewing which areas can be served without raising rates for existing customers," Brobst said. "We want to extend lines into areas where revenues from customers will be sufficient without raising rates."
Brobst said the most economical ratio is 12 customers per mile of water main.
Would-be customers must be charged a $6 base rate, even if they are not hooked up to the water line.
Brobst said this is a requirement of the U.S. Department of Agriculture (USDA), not Moore County utilities. The county has received most of its funding for the East Moore district from USDA's Rural Development agency, which has provided both grants and low-interest loans.
The North West Moore Water District has yet to get off the ground, the commissioners were advised.
Brobst said there have been insufficient sign-ups to justify continuing work on this project in the immediate future.
The best prospect, Brobst said, is development of a nucleus of such a system around school improvements. However, financial assistance from USDA-RD would be in the form of loans only.
Utility projects are financed through enterprise funds, with users footing the cost through fees charged for service.
Other building projects, such as the public safety-jail complex and the government office building, are paid for with tax money because they serve the entire population.
Contact Florence Gilkeson at (910) 693-2479 or by e-mail at firstname.lastname@example.org.
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