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Monday, 21 October 2013 16:25

Report: Weldon has several water plant options

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Weldon's choices when it comes to its water treatment include more options than selling it to the county, engineers noted in a report to the town board today.

The choices include four different options — all with sub-options — according to the feasibility study presented by The Wooten Company.

Those options include a takeover by the Roanoke Rapids Sanitary District; building a new 2-million gallon per day plant; upgrades to the current plant and the offer from the county to buy the plant for $800,000 after the town solicited a proposal.

Each of the proposals, presented by Wooten engineer Stephanie Malec, include varying financial consequences for the town.

Currently, according to the report, the town gets net revenue of $342,045 at existing water rates, operating a plant that was built in the 1920s and is currently at its capacity of 1.2 million gallons of water a day. It is also in need of structural and technological improvements.

“As far as the physical condition, we're limited to 1.2 million gallons a day,” said Public Utilities Director Jeff Elks. “We're at full capacity now. The building was built in the 1920s and remodeled in the 1980s. It provides great drinking water. The building is in disrepair in some areas. We're falling behind in technology.”

Malec noted in the report there are two scenarios where the town makes no money off the plant — the one where the sanitary district takes over the plant and the one where the county buys the system from the town.

Wooten presented two scenarios under which the town could make money under a sanitary district takeover.

One is the town buys finished water in bulk from the sanitary district and maintains its existing retail and bulk customers — a loss in net revenue of $176,094 excluding the cogeneration plant but a positive net revenue of $161,982 including the cogeneration plant.

Retaining only its bulk customers would realize net revenues of $210,765 with the cogeneration plant but a loss of $127,311 excluding it.

Cost to construct a new 2-million gallon per day treatment plant is estimated at $15,629,000. The report notes the operation and maintenance costs increase proportionate to increase in treatment capacity. Debt service is calculated at 2.5 percent interest over 38 years.

As with all but the county purchase scenario, there are sub-proposals, each one of them requiring increases in the town's water rates.

For the town to realize net revenue of $13,042 by assuming all the new construction debt, it would have raise its current residential water rate to $56.63 a month; in-town commercial rate to $104.10 and commercial rate for users of 125,000 gallons a month to $541.69. The same would apply for a $1 million infusion by the county with net revenue of $4,662.

Creating a water authority under this scenario, however, would spread costs across Weldon and users of town water in Northampton and Halifax counties, the report noted. It would mean less of an increase in water rates, except for those using more than 125,000 gallons per day. That rate would be $633.75 while in-town rates would be $17.87 and lower-end commercial rates would be $70.30.

This would result in net revenue of $293,076.

The drawback to this, said Dan Boone of Wooten, is under the authority scenario, like how the sanitary district operates, the town can't transfer money out and the authority sets rates.

Upgrades to the plant are estimated to cost $3,020,000, according to the report, and would be under the same debt service numbers as new construction.

Net revenue at existing rates would be $68,777 if the town were to go it alone; $78,452 with a $1 million infusion from the county and $68,777 under an authority.

An across-the-board water rate increase under the authority structure would mean $293,076 in net revenue.

The life expectancy of a water plant is between 20 to 30 years, Boone said. “You've been fortunate to have nearly 100 years of life.”

Upgrading the plant, he said, would be much like refurbishing a 1950s model car — it remains a 1950s car.

No decisions were made during the specially called meeting and Wooten left town board members with a matrix to help the governing panel make its decision.

“We need to take a hard look at the numbers and figures,” Mayor Julia Meacham said following the meeting. “This is the most important decision we have to make and we have to look at it all in the best interests of the taxpayers and citizens.”

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