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FPU continues to eye county sewer contract

Posted on Wednesday, July 31, 2013 at 4:18 am

While the Lincoln County Commission has accepted a $1 million U.S. Commerce Department Economic Development Administration (EDA) grant to help construct sewer infrastructure along the Huntsville Highway south of Fayetteville, Fayetteville Public Utilities continues to examine a proposed agreement for construction, operations, maintenance and management services for the county sewer system.

That service agreement must be approved by FPU’s board of directors prior to the project moving forward. In the meantime, however, FPU’s board has agreed to be a co-applicant for the funds, a move that will not create a liability issue for the utility should the project fail to come to fruition, according to Britt Dye, FPU’s CEO and general manager.

“We haven’t seen anything that would be a conflict for us signing the grant application,” Dye told FPU’s board of directors last week.

The proposed service agreement is still being examined by FPU officials, attorneys and the Municipal Technical Advisory Service (MTAS), an agency of the University of Tennessee Institute for Public Service that provides technical assistance to cities and towns across the state.

“I am no where near finishing that,” Dye said of the proposed service agreement. “I have a lot more questions about it.”

According to Dye, MTAS has reviewed the contract and come back with “15 bullet points” of concern – “They have some of the same questions I have,” he said.

“There are a whole lot of issues to work out before I feel I can bring it to the board,” Dye added. “Number one, I’ve got to protect the city and the FPU customers.”

Overall, $2,580,500 has been committed to the county sewer project, driven by getting sewer along the Huntsville Highway and to Runway Centre. The almost $2.6 million includes $750,000 from the Tennessee Department of Economic and Community Development, $830,500 from Tennessee Department of Transportation for construction of the road, and the federal EDA grant of $1 million. Funding from the county has included five cents on the county’s property tax rate that was approved in last year’s budget – that five cents should generate roughly $250,000. Additionally, officials are also applying for a Tennessee Valley Authority grant to assist with the project, according to County Mayor Peggy Bevels.

A portion of funding for the project will also come from tap fees charged to businesses and residents along the path of the sewer line.

In other business during Wednesday’s meeting of the FPU board, it was noted that all FPU departments – electric, water/wastewater, gas and telecom – finished in the black for the sixth consecutive year.

“That’s something to be proud of,” Dye told board members.

“We’re watching every penny,” the manager said after the meeting. “Everybody here is doing a good job at cutting costs.”

In relating information items to the board, Dye noted that FPU is continuing to pursue purchasing Ardmore gas customers and the existing plant. FPU attorneys are gathering additional information, eyeing easements and all agreements prior to completing the purchase – “We’re doing our due diligence,” Dye said.

The FPU board agreed earlier this year to move forward with purchasing 164 customers and 18.44 miles of line from Athens Gas for $574,000. The Athens utility had approached FPU earlier this year about serving the Tennessee customers, saying it only wanted to serve customers on the Alabama side of the area.

In other action, the board approved continuing to retain Whitney Stevens as board attorney, as well as Putman & Hancock as the board’s certified public accounting firm. Additionally, board officers were re-elected. Janine Wilson was elected chair of the board, William Hurd was elected vice chair, and Glen Oldham was elected secretary-treasurer, the same offices the three held previously.