• Will county taxpayers end up paying the price?

By NICOLE CARTRETTE
Staff Writer

Good news for three local municipalities getting public sewer infrastructure may be bad news for county taxpayers.

A sewer system project involving the towns of Boardman, Fair Bluff and Cerro Gordo will pump sewage from the three Columbus County municipalities to Fairmont’s treatment plant in Robeson County.

Certain provisions in a 23-page interlocal agreement first signed in October, 2004 and amended in April 2005 make the county responsible for upkeep and repair of force mains and lift stations.

Some county officials say keeping up their end of the deal may cost taxpayers. “That contract is going to cost you money,” Interim Finance Director Leo Hunt told the board Monday (July 16).

Economic development

Tabor City Manager Al Leonard, consultant to the three towns involved, takes a different view.

He sees it as an opportunity the county couldn’t pass up to bring sewer infrastructure to the county in the name of economic development.

The construction is 100 percent financed by grants – one worth more than $3 million.
“This is being portrayed as a bad thing – but it’s a good thing,” Leonard said Friday.
While pump stations can be very costly, Leonard pointed out that force mains can be relatively inexpensive. “Most force mains stay relatively clear (of blockages),” Leonard said, pointing out in his 20 years of experience with Tabor City’s system there has been only one force main problem.

County Manager Jim Varner said the infrastructure is needed and important but that there are too many unknowns.

Don’t know

“I don’t have any way of knowing at this point what the expense will be,” Varner said. He said he has been unable to locate any cost formulas or figures used to set the rates. He does not know the number of customers anticipated.

“There are too many unknowns at this point,” he said. “We will work it out for the best. We’re not in a fight.

“Somebody put a lot of thought into it and handwork,” Varner added.

Last week, Varner told the board there might be problems with the contracts. “Those contracts are difficult to read – the rates are set,” Varner told the board, adding that lift stations would need to be manned and leased at the county’s expense.

Columbus County will operate the system and pay sewage treatment fees ($2.29 per 1,000 gallon) to Fairmont.

The towns in turn will pay their respective portions of the sewer treatment bill to Columbus County, plus an additional $2.50 per 1,000 gallon for operational and maintenance expenses.
Not feasible

Hunt says the additional $2.50 per 1,000 gallons likely is not enough to cover the cost of additional personnel needed to operate and maintain the lift stations, plus travel and vehicles. “I don’t know that the county can make it off of that,” Hunt said. “It doesn’t look feasible.”
Leonard disagrees. “The most expensive part is cleaning water up at a treatment plant,” Leonard said. “Fairmont’s price per 1,000 gallon is cheaper than what Columbus County is going to get.”

“It is intended that this rate will cover ordinary operation and maintenance, testing, reporting, inspection and electrical costs associated with the regional and the Cerro Gordo and Boardman systems,” the contract reads in part. “Columbus County will, using the funds collected from this rate, also take care of any repairs and/or operational and maintenance needs within Cerro Gordo and Boardman systems that do not exceed $5,000.

“Columbus County will be responsible for all costs associated with those system components for which they will have ownership.”

It’s not clear, however, if county residents will be able to hook onto the county-owned portions of the system – another concern for county officials.

Varner said it might be that with the high-pressure line “it’s not a good policy to tap on.”
“I don’t know enough about it,” Varner said. “It will take us a while to work it out.”
Commissioner James Prevatte said the board was told amendments to the contract in 2005 would not cost the county money.

Review of board minutes from April 2005 indicate the past administration did tell Prevatte it would be at no cost to the county but there are no cost formulas included in the minutes or details explaining how the initial rates were determined.

Lease not final

Although the main agreement is a done deal, negotiations are currently underway between Boardman and Columbus County regarding the lease of property for two of the pump stations associated with the project.

A draft of the lease agreement obtained last week names Water and Sewer District II as the responsible party involved in the contract yet to be approved.

The lease agreement calls for monthly payments to Boardman for the Cerro Gordo Master Pump Station Improvements and Lands and the River Master Pump Station Improvements and Land.

The lease payments would total $4,800 a year for 40 years.

Varner said it does not involve the water districts and the project would not cost the district.
Hunt says the sewer would be accounted for separately under another fund in the county budget.

It is unclear, however, why the district is named in the draft lease.

It is unknown if there is a newer version of the document stating otherwise.

The county attorney’s office was contacted Friday afternoon but attorney Steve Fowler was out of the office.

Water District II is one of two county water districts where special water taxes are levied at a rate of 9 cents per $100 value to pay debt service and operational expenses. More than 40 percent of the district’s expenses come from the tax.

Insurance

The district would also be responsible for casualty, fire and hazard insurance with Boardman appearing on the said policy as an additional interest insured, according to the draft proposal.

The district is required to maintain a minimum of $1 million in liability insurance with Boardman as an additional insured interest. “District shall defend, indemnify and hold harmless Boardman from and against any actual or threatened claim, loss, expense or damage (including attorney’s fees) to Boardman” with the exception of acts caused by the affirmative negligence of Boardman or its representatives” arising out of any act or neglect of the district, its servants, employees, agents, or invitees.

The district shall provide and pay for all utilities of whatever sort, kind and nature, serving the premises and necessary or convenient for the conduct of the district’s activities and use of the premises,” the agreement reads.

During the 40-year term of the lease, the water district is responsible for “all major and minor repairs” to the buildings’ interior and exterior.

Boardman has the right to inspect the premises with reasonable notice.

After 40 years the county has the option to buy the property for $192,000 (the total amount of all lease payments made) with the lease payments serving as payment in full.