The city looks to replace about 27 miles of waterlines under their Waterline Replacement Program.Covington City Council approved for grant writer Randy Conner to apply for a loan for $5,981,115.25 with the Georgia Environmental Finance Authority under the State Revolving Fund to replace aging water lines in the city's water system; and approved for Richard Aiken with Rindt-McDuff Associates to assist with the engineering for the project.
Conner told the council that the loan will not exceed the debt service coverage ratio for the city of Covington's water fund beyond 1.05 percent, which would trigger an increase in water and sewer rates within the cities system.
"We will not raise the water and sewer rates under this program. That's been made very clear through discussions and also in our work session. We would not want to be in a position of raising those rates," Conner said.
He said under the Waterline Replacement Program, they will replace a number of waterlines within the city that are transite waterlines. He explained that transite waterlines contain asbestos cement, which was used for waterlines in the 1900s until the latter part of the century because it allowed them to be stronger and last longer.
"The test that we do on a regular basis of our system shows there is no danger and that there is no problem with our waterlines. But we want to be proactive as opposed to reactive and we want to replace these water lines while everything is still good," he said.
Conner supplied the council with a list of four projects, which showed the streets where the waterlines would be replaced under the State Revolving Fund loan.
"We divided them down into these smaller projects because it will allow us to allow smaller contractors to bid on these projects," Conner said. "If we did it all in one big project, then the bonding requirements would be so expensive that the smaller contractors just would not be able to build."
Conner said the projects have been graded in order of need. He said a number of the city's water lines are more than 100 years old and some of the lines are continually leaking and experiencing breakage; therefore, they needed to be replaced.
"This loan will allow us to get the oldest ones out of the way. That's our pressing issue right now," he said. "There is no problem with our water system; we just want to be proactive."
The State Revolving Fund loan is a 20-year amortization loan at a rate of 0.82 percent. He said the city was able to get the loan at a rate less than one percent because Newton County was a WaterFirst community. He explained some of the water loss and how the loan rate would amount to a significant savings.
"Currently our non revenue water is running at 19.99 percent, and when we say non revenue water, that's a way of saying this is water that we are buying that's not being billed out to our customers," he said.
"So far this calendar year we have purchased $187.3 million gallons of water that has not been billed. There are several reasons for that; one would be this is some water that has been used say in the month of November that will not bill our customers until the month of December. When the fire department flushes out the fire hydrants and flushes out the lines, that water would go unaccounted for. But probably 5-7 percent of this is water that is lost through leakage and breakage in the lines," he said.
"We feel like this is the right time for us to make an aggressive move to eliminate these problems," Conner said.
"To give you an idea of what this means, if we finance $6 million dollars, the savings over a 20-year amortization, the savings would be $652,976. This is what that designation would safe us."
Conner also told the council that an additional $1.5 million in the city's water reserves fund would be added to the project, which would amount to an estimated total of roughly $7 million dollars for the projects.