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FPU, county move closer to Parks City sewer agreement

Posted on Tuesday, November 19, 2013 at 6:19 am

Despite a request from the board of mayor and aldermen to delay entering into an agreement to provide operations and maintenance services for sewer in the Parks City area, Fayetteville Public Utilities is poised to move forward in what it terms a “win-win” situation for its ratepayers.

FPU officials received the letter of opposition — which passed the board of mayor and aldermen 4-2 Tuesday evening — just before its work session Thursday afternoon to review a proposed contract between Lincoln County and the utilities. The letter requests “additional time to study the proposal and its likely impact on the residents of the City of Fayetteville.”

“At this time, members of the Board of Mayor and Aldermen have concerns that the proposed sewer expansion will negatively affect the City of Fayetteville and its residents and the proposal warrants further review, consideration and input from those who will be affected by the creation of this agreement,” the letter reads.

Voting in favor of sending the letter of opposition were aldermen Danny Bryant, Marty Pepper, Gwen Shelton and Tom Young. Voting against sending the letter were aldermen Dorothy Small and Michael Whisenant.

FPU and county officials contend, however, that several meetings and work sessions have been held on the issue since talks between the two entities began in February, and that further delays may jeopardize grant and loan funding secured for the project. A deadline of Dec. 30 for having the agreement in place looms or else the county risks losing state and federal grant and loan funds. FPU board members also expressed concerns Thursday that no one from the city board in opposition to the plan was in attendance during Thursday’s work session to discuss issues of concern.

Talks of opposition first came to light in a special called meeting last month when the board of mayor and aldermen discussed numerous concerns relating to the project, from questioning the financial sufficiency study and proposed rates for service, to the prospect of annexation, and, ultimately, to fears that ensuing development could see Park City outgrowing Fayetteville and leaving it in the dust.

FPU officials have said during recent meetings that its primary obligation is to do what is best for its ratepayers – both city and county.

“Our job is to do the best that we can do for the ratepayers, and that includes the county,” said Micky Lawson, an FPU board member, noting that sewer in Park City will not only grow jobs for the community, but will also result in customer growth for all of FPU’s divisions, electric, telecom and gas.

“We’re getting a gift from the county,” said Lawson. “We don’t have a clue when they’re going to lift the ban on annexation, but the time clock is ticking on these loans and grants … if the city wants to annex down the road, who do you think is going to pay for sewer then? The ratepayers of the City of Fayetteville. We’re getting a gift here.”

According to the proposed agreement between Lincoln County and FPU, the county is obtaining funding and contracting for the installation of the sewer in Parks City with no cost to the city or FPU for building the infrastructure. Should annexation take place down the road, the city and FPU would have to foot the bill for building the sewer lines then, Lawson said.

“This is really a no-brain situation,” Lawson added.

FPU board member Linda Schoenrock said that while she believes FPU is the logical service provider for Parks City sewer, she feels strongly that the city board’s request to delay action and hear concerns should be addressed in a meeting involving all entities – the city, county and FPU.

“Whether you agree with them or not or whether you like them or not, I feel like the city has spoken and they have said it’s a bigger picture … as a board member, I think FPU would be wrong turning a cold shoulder to them. Whether I agree with them or not is beside the point; I feel like this request is not unreasonable.”

FPU’s attorney, Whitney Stevens, was asked his opinion on further delaying action.

“When you start looking at a request for a delay so you can look at a project more – this project has been going on since 2011 – and we don’t have the other (opposing) aldermen come here, I don’t think that letter is in good faith,” he said. “I think that letter is meant to delay, which they know will unseat this project. There is no reason – no reasonable reason – to delay for 30 days, 60 days or a year and think the facts would be more acceptable to the city than they are now.”

Dudney Fox, engineer for Trestles, the firm working on the county sewer project, said that the project has been reviewed by numerous state and federal entities and determined to be viable based on funding awarded. He warned that failure to meet the December deadline would result in the loss of grant funding for this and possibly future projects.

“Any delay will cost this grant money,” Fox said. “That will have far-reaching implications. You’ve had local, state and federal officials behind us … should this not go forward in a timely fashion, that will cost everyone.”

FPU’s board is expected to vote on the agreement at its regular meeting Friday morning; however, since the Lincoln County Commission is scheduled to meet in regular session Tuesday night of this week, and since discussion of the agreement is already on the agenda, FPU board members agreed to ask city officials to join them at the commission meeting to discuss any concerns at that time.

Thursday afternoon’s FPU work session focusing on the proposed agreement began with Britt Dye, CEO and general manager, outlining the history of the Parks City sewer effort dating back to a meeting of area leaders in 2011 identifying sewer in Parks City as the community’s number one need. Dye also outlined key components of the proposed agreement, including how FPU would be paid by the county for operation and maintenance services.

“FPU will bill Lincoln County sewer customers based on water usage provided by LCBPU (Lincoln County Board of Public Utilities,” Dye said. “Once a month, FPU will remit revenue to Lincoln County. Once a month, Lincoln County will pay FPU a capacity guarantee based on the agreement, a management fee based on a prorated share of FPU costs and operations and maintenance expenses of the FPU system based on the county’s flow in that portion of our system.”

According to the agreement, Lincoln County will be responsible for all costs per the agreement, regardless of the county rate revenue. FPU will be responsible for expenses for repairs of equipment up to $5,000. Once those repairs exceed $5,000, Lincoln County will be responsible for the repairs. FPU will receive a management fee that will cover these expenses.

FPU will collect tap fees that will adequately cover expenses, Dye said. Either party may request an annual review of the rates and charges for services.

“Flow on which Lincoln County will pay FPU is based on the actual flow measured by the master flow meter so that all flow (including infiltration) that enters our system and plant will be paid for by Lincoln County,” Dye explained. “This agreement is for a term of 10 years with an automatic renewal of five years. If the agreement is terminated, FPU agrees to accept up to a maximum of 700,000 gallons per day of wastewater for a period of not less than 10 years.”

According to Dye, FPU’s Wastewater Treatment Plant has capacity to treat 3.35 million gallons per day, but has an average flow of 800,000 gallons per day. The estimated total county flow is expected to be no more than 700,000 gallons per day.

“Providing this service to Lincoln County within the terms of this agreement will allow FPU to share the cost of a major trunk line and its wastewater treatment plant,” Dye said. “This sharing of costs will allow FPU and the current rate payers the possibility to minimize rate increases necessary to operate the current wastewater system, pay for improvements needed in the current wastewater system and reduce future requirements for debt to improve the current wastewater system.

“Although MTAS (Municipal Technical Advisory Services) rate studies project rate increases for current ratepayers for several years to come, current ratepayers will not see a rate increase as a result of this agreement,” Dye added.