Water Expansion Project
Published 4:52 pm Thursday, July 7, 2011
CUMBERLAND – The County's Supervisors recently adopted a resolution authorizing the financing and approved the issuance and sale of its water system revenue bond in the maximum amount of $939,000 and they accepted a $1 million grant from USDA Rural Development for the expansion of the public water system in Cumberland.
The decision came after a public hearing during the Board of Supervisors' June meeting.
The existing public water system is being expanded along Route 60 from the courthouse area to its intersection with Route 45 near the Cumberland Community Center.
Once in place, the infrastructure will provide secure and adequate water to the Community Center and to the proposed shopping center development, Patriot Ridge, slated for Route 60, according to the comments made during the discussion.
According to the County Attorney, Howard Estes, the water revenue bond's maximum interest rate is 2.75 percent for a 40-year term.
And the revenue from the sale of the water will secure the financing for the project-not County funding or, essentially, tax dollars.
“There are mandatory connections set up along the way just like it is with the old system,” said Estes. “The County also received grant monies…to pay for the citizens to connect to the system at no cost. The USDA allows grant dollars to be spent only for the project, which is only the supply lines…”
“The lines that go from the taps to the individual residents or businesses will receive grant monies…and those dollars will be available for citizens so they will be able to get on the public water line at no charge,” continued Estes about an additional grant that was secured by the County that assists citizens with the mandatory connection fee to tap into the County's water system.
With respect to the total amount, Estes said, “It looks like the line should be at least $100,000 less than what you should be approving tonight.
“The construction costs have come down substantially…,” he added about the difference in construction prices from when the project started in 2006.
Later, Supervisor Tim Kennell, District Two, asked if it was necessary to have “bond council for this project?”
“It is,” noted Estes. “The County hired legal council and I'll be serving in that role. Estes & Associates has already been hired from two years ago.”
Kennell then asked, “How much was that? Do you recall?”
According to Estes, that amount “is in the budget.”
“But I don't know what exactly that's going to be because we've got eminent domain proceedings as well,” he told Kennell.
When the public hearing was opened there was one speaker.
Supervisor Bill Osl, District One, asked Estes to reiterate that the revenues generated by the project would repay this loan.
“It is a debt of the County but it is a revenue debt only,” explained Estes. “It is not a general tax obligation.”
He later agreed that the project is “self-funded.”
Kennell noted that this is a “need” and is “financed by the citizens that will be using it.”
Osl made the motion to approve the resolution authorizing the issuance and sale of the bond and the acceptance of the $1 million grant from Rural Development.
The Board of Supervisors approved the motion unanimously.
“It gives our county the ability to expand the shopping center or other areas in that area and if we have any intent to grow at all we've found a reasonable funding mechanism to take care of this debt and I don't see any taxes going up,” concluded Kennell about the water expansion project.