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Park City sewer moves closer to reality

Posted on Tuesday, October 1, 2013 at 12:46 pm

Sewer in Park City is one step closer to reality with the release of a financial sufficiency study and proposed rates for service in the area.

Representatives of Municipal Technical Advisory Service (MTAS), which provides technical assistance and consultation to city departments across the state, were on hand during a work session last week with Fayetteville Public Utilities’ board of directors, presenting details from a financial study MTAS conducted on the proposed sewer system in Park City.

“Start up of a new utility is a difficult, expensive and time-consuming process, and Lincoln County is commended for their foresight and commitment to the project,” MTAS Consultant Ralph Cross said during the work session, attended by county leaders and members of the Sewer Ad Hoc Committee.

County representatives had approached FPU earlier this year to ask the utility to consider providing management and treatment services for new sewer in the Park City area. And, while Lincoln County officials and FPU have not yet signed an agreement for the utility to provide those service, the bodies have worked together, along with the consulting engineer, to provide information so that MTAS could analyze the various cost components, including the costs of treatment, transportation and operation of the sewer system.

The financial study focuses on what is known as Phase I of the sewer project, an area which basically runs along the Huntsville Highway from the top of Park City hill to the state line, with the initial leg of the project stretching to about Highland Rim Road and being in operation by July 2015.

Funding for Phase I would include approximately $1.7 million in grant funds and $3.5 million in low-interest loans secured by Lincoln County.

MTAS consultants have analyzed the cost of the system to determine the necessary revenue to operate the sewer system on a sound financial basis, creating a rate structure that will provide the revenue needed to fund expenses and provide necessary cash flow for principal repayment and capital investment, Cross explained.

“The recommended rate structure is designed to provide a reasonable revenue stream but does not generate positive operating income until Fiscal Year 2018-19,” Cross said. “Profitability projections are influenced by customer participation, receipt of grants and low-interest financing.”

According to discussion during the work session, FPU would consider discounting certain expenses over the first four years to promote the growth of the county water system.

Officials noted that the projections presume the minimum bill will be charged to customers in the service area, whether they connect to the system or not.

The proposed rate for residential sewer bills is $25.58 per month as a minimum bill. The monthly bill rises to $54.50 for 3,500 gallons of use, $65.03 for 4,500 gallons of use and $75.57 for 5,500 gallons of use.

Rates for commercial, industrial and school sewer bills are $35.00 for a minimum bill; $142.14 for 10,000 gallons of use; $315.97 for 25,000 gallons of use; $605.70 for 50,000 gallons of use; and $1,185.16 for 100,000 gallons of use.

“This is not out of line for what you’re seeing across the state,” Dudney Fox, an engineer with Trestles LLC who is working with Lincoln County on this project said of the proposed rate structure. “This is consistent with what you see. Cost of sewer is generally on the rise … gone are the days of the $20 sewer bill. It’s not uncommon to see $70 (bills).”

Doug Cunningham, chair of the County Sewer Ad Hoc Committee, said getting sewer into the Park City area is “critically important.”

“I think we all agree that Huntsville Highway is our best chance for growth,” Cunningham said during last week’s work session. “If we don’t get sewer out there, we’re never going to have anything more than what’s out there right now.

“There are areas out there people would love to build a business on, but the ground won’t perk. We have businesses out there that on a rainy day, they can’t flush the toilet. They have to send their employees home to use the restroom.

“I really believe if the state felt like we weren’t trying to get sewer out there they would stop us from building,” Cunningham added. “It’s gotten to that point. If we ever have a ‘stop building’ moratorium, that’s going to be a noose hanging around the neck of everyone in Lincoln County.”

Britt Dye, FPU’s CEO and general manager, thanked the county for the opportunity to explore providing service for the proposed sewer system.

“We’ve got a very aggressive board,” Dye said. “Their vision is always to do what’s best for the community.”

With the financial study completed and a rate structure suggested, the next step is for Lincoln County officials and FPU to continue work on a service agreement.

“That’s the next big step, nailing down an agreement between Lincoln County and FPU,” Cunningham said after last week’s work session.