PE, Farmville Weigh Shared Authority

Published 4:09 pm Tuesday, June 7, 2011

PRINCE EDWARD – Whether an “authority” that would not be directly controlled by the County or the Town of Farmville is the answer for the two entities seeking water solutions is still to be determined but such a proposal was presented as an option Friday morning in a joint meeting.

“…This could very well be a news article if the council and the board approve the concept and further exploration of the concept that will be presented,” commented Board Chairman William “Buckie” Fore.

It's off to a supportive start as both Town Council and Prince Edward's Board of Supervisors are at least initially doing that. Both unanimously voted to continue to pursue the development option.

Specifically, if it is approved by both Council and the County Board, an authority could mean the County would not get into the water business (as they are currently studying to do) and the Town would get out of the water business.

Both public water and sewer utilities-with the support of the Town and County-could be offered and serviced by a separate entity, an Authority.

Fore read a joint statement from the Town and the County outlining that the two would be jointly exploring the feasibility of combining the current utility infrastructure into such a regional water and sewer authority.

“The County and Town would each convey its respective existing infrastructure to the Authority,” the statement detailed. “If it is decided to move forward, the details of these conveyances would then be finalized by the governing bodies.”

It further states, “It is envisioned the Authority would issue revenue bonds to purchase the existing infrastructure from the Town and County. All current customers of the County and Town would become customers of the Authority. The revenues currently generated by those customers would be used to pay the debt service. The debt will be structured so as not to require rate increases for current Town and utility customers or a tax increase for County or Town residents.”

Among the other highlights to the proposal:

*The Authority would consist of a nine-member board with six members appointed from outside of the Town and three from inside the Town, following a formula similar to funding for the joint Town/County library. The goal would be to have citizen appointees.

*Town Manager Gerald Spates would initially be the general manager of the Authority and County Administrator Wade Bartlett would be the assistant general manager/finance director.

*Town public works employees would continue to provide the operations and maintenance on the water and sewer infrastructure and the Authority would be charged for labor expenses. The Authority would fill vacancies or those due to expansion with Authority employees. The Town would also handle the billing and collection for the Authority and serve as fiscal agent until they choose to perform those tasks.

“The conveyance of the use of water from the Sandy River Reservoir by the Authority will be decided through future negotiations with the Authority,” the joint statement reads. “The Board of Supervisors, as owner of the Sandy River Reservoir, in conjunction with the Authority, will continue to explore solutions for solving the communities' long-term water supply issue. Combining the Town and County utilities into one entity is an important first step toward enabling the Prince Edward-Farmville community to determine the most cost effective solution to solving the long-term water supply issue without regard to political boundaries, service areas, or current customer base.”

The Authority would also continue to explore the inclusion of Hampden-Sydney College and surrounding towns and counties, according to the statement.

The plan, the statement details, accomplishes four main goals: allows the Town to access the equity value of its current infrastructure, creates a partnership between the two entities and allows “a cohesive and orderly decision making process on the maintenance and expansion of the water and sewer infrastructure which is vital for community economic development”; “transitions decision-making from a political to a business environment”; and positions the region to successfully compete for grants and low interest loans to aid in the upgrade and expansion of infrastructure.

Some Thoughts

“At this point there's been much work done in…the negotiations between the Town and the County, but before we spend any more time in negotiation on this particular concept, we need an OK if you will from both the Town Council and the Board of Supervisors to continue along these lines,” Fore would comment after reading the joint statement.

The consensus-and vote in separate motions-was that they continue to explore the options, still there were some initial questions.

Supervisor Don Gantt asked about changes in the rates for town citizens.

Spates noted that they've looked at rate increases coming up sometime in January.

“…If you take a look at our water and sewer rates based on what other communities charge, we have not increased our rates to keep up with…the high cost of electricity and fuel and the current cost of producing water and the new requirements from the health department. So…we're behind on our rate increases.”

Their bi-monthly bill, Spates would also cite, is probably equal to what most communities charge per month.

Asked if changes were envisioned outside of the town limits as far as rates and availability to water hook-ups, Spates said he would think availability fees and hook-up fees would change and that if they didn't work out a joint agreement, the bills per thousand gallons of water would probably go up a little.

On a motion from Dr. Edward I. Gordon, Council on a roll call vote unanimously agreed to continue with the concept.

Gantt also offered a motion to implement and move forward with negotiations. It was also unanimously approved.

Further Discussion

While the Board and Council will indeed pursue the development of an Authority, questions continued beyond the vote.

Supervisor Jim Wilck asked if there is any rough idea what the bond amount is going to be.

For the moment, that is an incomplete.

Spates noted that they need to know what the system is worth, plus there are things to take into consideration like the age of some of the pump stations and if they are going to have to be replaced.

Wilck also looked to determine the relationship between positive cash flow and how much it would cost to pay off the bond and so forth.

Wilck additionally asked about the reasoning that went into a nine-member board with six from the county and three from the town. He cited that the Town had probably 99.9 percent of the customers and most of the infrastructure.

The thinking, Fore would offer, is two-thirds, one-third population.

“Will that affect how much the County pays into, say, future improvements and so forth?” Wilck asked.

Fore would respond that it will all be done by the Authority. Spates would later clarify that the Authority will have the authority to raise rates to cover the expenses.

He also offered that one of the key things they run into every time that they've applied for grants with some agencies their rates are too low.

“They say you can raise your rates and cover the cost of the improvements…,” Spates said. “So…you're kinda caught in a Catch-22 on it.”

The rates are something the Authority has to look at, Spates cited

“…What we've been doing is the Town's been covering a lot of these improvements with general funds,” he said. “So…that's why you set up the Authority so that the Authority…can borrow the money to do the improvements and it's spread over a larger group.”

Asked about an enhanced opportunity for grants, Spates cited that Hampden-Sydney and Cumberland Court House are sewer service customers. Spates cited that the system is regional “so it puts you in a little better position to get some funding. And you may have other communities that want to come into the system.”

Supervisor Mattie Wiley offered that the County and the Town need to work together. She conceded it is “like a rough draft” and asked about future opportunities to discuss the proposal.

“Keep in mind…this is a concept and there are many, many, unanswered questions even for those of us who've been fooling with this thing,” Fore said. “…It's (going to) take us a good while to work through everything.”

The Council and Board also plan to be listening to the public input.

“The intent of this announcement is to invite public input from the citizens of the Town of Farmville and Prince Edward County regarding this concept,” the joint statement outlined. “All of the details are still to be determined through negotiations between the Prince Edward County Board of Supervisors and the Farmville Town Council. If it is determined this is a concept supported by the citizens and the two governing bodies, the steps required to implement this concept will be developed.”

Fore cited such options as attending board meetings, emailing the County, calling the supervisors.

“We are inviting the comments,” he said.

Spates also offered that as they go along the process that they would probably have public meetings, suggesting that when they get enough to present to the public that there would be several different information meetings.

The idea now, Bartlett would suggest, is to just get the concept out to the public.

Councilman Donald Hunter offered that he really believes “this is the way to go” and cited the need to make sure that everyone is involved.

Ms. Wiley also cited that it seems to be a workable solution.

Asked about a projected timeframe, Bartlett assessed it would take months to complete the process. There would have to be a review of values, engineering reviews how best to combine the existing systems and how best to cure the long-term water supply for the whole community, and going through the bonding process.

Then, too, there's the Authority itself. County supervisors have already gone through the process to create an Authority about three years ago (The Heartland Water and Sewer Authority), but it would still have to be determined whether it would be best for the Town to join that Authority or to create another Authority. Current members include the current members of the board of supervisors.

One resident asked if it meant the PPEA is not going to happen on the Sandy River plant and lines.

That would be a board decision, but Fore offered that he suspects that they'll work through the interim agreement, but that it would be something that the board is going to have to decide.

Fore would later offer that they would have to go back and revisit what they're doing.

Prince Edward's Board Vice Chairman Howard Simpson also offered that he wanted to see the Town and the County “get together and work this problem out that's suitable for everybody in the Town and everybody in the County to benefit from this project.”