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Posted: June 1, 2013 5:46 p.m.

Water costs increasing for some

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Attached is the budget summary for fiscal year 2014, which begins July 1, for the Newton County Water and Sewerage Authority.

Some Newton County residents will be paying more for water and sewer service beginning next month.
The Newton County Water and Sewerage Authority and the city of Porterdale are both raising their rates, and in both cases the hikes stem from the cost of reinvesting in piping and delivery infrastructure.

Newton County, which produces clean drinking water from its Lake Varner reservoir and sells it wholesale to the water authority, local cities and other groups, is not increasing its wholesale prices, said Jason Nord, director of Newton County Water Resources. Covington has no plans to raise its rates, said Deputy City Manager Billy Bouchillon.

Water authority
The water authority is raising its rates by 3 percent for water service and 5 percent for sewer service, which will result in a 90-cent increase on the monthly water bill and a $1.80 monthly increase in sewer costs based on the average use of 5,000 gallons per month.

A resident who uses 5,000 gallons a month pays $66.16 a month now and would pay $68.76 a month under the increase.

The price increase will take effect July 1.

The increase is actually lower than last year, when both water and sewer rates were raised 5 percent, resulting in a $3.79 total increase for residents who paid for 5,000 gallons of water and sewer service.

Most county residents only get water from the authority and have septic tanks instead of using public sewer service. Authority Executive Director Mike Hopkins said around 75 percent of the authority’s 22,000 customers only pay for water.

“These adjustments are necessary to cover the costs of inflation, investment in system improvements, repair and replacement of aging pipes and equipment, and relocation of lines to clear road construction,” Hopkins said in a press release.

“While no one is fond of price increases in these economic times, we must stay the course on our mission of protecting public health by delivering safe and reliable drinking water at a competitive rate, improve public safety with broad fire protection, and protect our environment and waterways through efficient wastewater treatment.”

The authority has raised its rates every year since 2007, except for 2009; however, Hopkins said that’s because the authority has raised prices slightly each year as opposed to having one big price hike. It bases rates on how much revenue it needs to run its operations, pay off existing debt from prior projects and plan for new projects.
The authority has about $10 million worth of outstanding debt, which will be paid off by 2017. It recently refinanced two bonds and rolled them into one bond at a lower rate, saving $318,000 in payments over the life of the bonds.

However, the authority also had to take a $14 million, low-interest loan from the state to pay to build the piping infrastructure to connect Baxter International’s plant to the city of Covington’s wastewater plant. The authority doesn’t have to begin paying off the 1.82 percent interest, 20-year loan until the existing debt is paid off in 2017. Because Newton County recently received state designation as a WaterFirst community, it received 1 percent off its interest rate, which Hopkins said will save $1.6 million in payments.

According to its planned budget for fiscal year 2014, which begins July 1, the authority will end up with up with net revenue of $374,891, after paying for day-to-day costs, some projects and $2.92 million in debt service.
While it pays off debt, the authority also will have to deal with projects as they come up. One variable is the cost of relocating pipes for road projects. Moving pipes for road projects on Ga. Highway 212 and Crowell Road has cost the authority about $500,000 apiece, and the authority receives no reimbursement for those costs.

The authority has two standard types of pipes, PVC and ductile iron. Much of the system is composed of PVC pipes, but those are generally designed to run alongside roads, not under them, where the constant vibrations and pounding of traffic can break a pipe. Ductile iron pipe can withstand that pounding, but the authority has to pay whether it chooses to replace PVC with iron pipe or move the PVC pipe.

The extra revenue from the rate increases, about $650,000 total, will help with those costs as well as giving the authority more flexibility to invest in its infrastructure system, Hopkins said. It has a 20-year capital improvement plan. Some of the most pressing projects are replacing 40-plus-year-old pipes along Brown Bridge Road and expanding the size of pipes to increase capacity along a 12- to 15-mile portion of Ga. Highway 36. The authority is hoping to be able to pay for some of these projects without borrowing.

Water and sewer rates are the main way the authority gets money, since new development has been at a standstill for years. The authority used to make $2 million in new taps fees per year when development was booming, but that source of revenue is less than $500,000 in recent years. In addition, conservation efforts – which Hopkins said are definitely a positive – have reduced water usage from about 140 million gallons previously to 110 million to 115 million gallons a month.

The hope is to avoid a situation like the one that happened in the early 2000s, when the western part of the county was growing too quickly for the water delivery system. Homes would have issues with low pressure during peak usage times because the pipes simply weren’t large enough to transport enough water at one time. Also, there weren’t water storage tanks on the west side.

It takes years to fix that kind of problem, Hopkins said, as well as $20 million. Hopkins doesn’t want the authority to find itself in that kind of bind and having to borrow that kind of money again.

Porterdale
The Porterdale City Council is set to vote on its own increase at its meeting at 6:30 p.m. Monday at Porterdale City Hall.

Porterdale has a loan from the state – the Georgia Environmental Finance Authority – and is seeking a loan from the U.S. Dept. of Agriculture for a sewer project; both loans require Porterdale to have a certain ratio of revenue over expenses to ensure the city will be able to pay back those loans, according to City Manager Bob Thomson.
The changes required are 55-cent increases to both the city’s water and sewer rates.

The new rates for residents will be $7.59 for 1,000 gallons of water and $8.12 for 1,000 gallons of sewer.
The new rates for businesses will be $8.24 for 1,000 gallons of water and $8.83 for 1,000 gallons of sewer.
While Porterdale doesn’t have a tiered system per se, the minimum bill for residents is based on 2,000 gallons a month, while for businesses the minimum bill is based on 3,000 gallons per month.

No increase from county
Nord, water resources director for Newton County, said the county will not have to increase its wholesale rates because its costs have stabilized, particularly on the chemicals needed to treat water to make it drinkable.
Nord said oil prices have stabilized, which helps in the water business because many chemicals used are derived from petroleum in some way. Electricity costs also have stabilized, he said.

He also said the county is seeing a slight increase in water sales compared with past years when water sales were consistently declining.

“As long as we don’t see a downturn in the economy where we’re losing customers, we should be fine,” Nord said.

The county has contracts to sell water at different prices to its nine customers, which are the water authority, the cities of Covington, Porterdale, Oxford, Newborn, Mansfield, the Jasper County Water and Sewerage Authority, Walton County (which owns a share of Lake Varner) and the Alcovy Shores Water and Sewerage Authority, which is a small group serving the Alcovy Shores subdivision off Jackson Lake.

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