The proposal could help Newton County out of its financial woes.
At the Oct. 4 Board of Commissioners (BOC) meeting, the Commissioners voted 4 to 1 to move forward with a proposal to sell the county’s water infrastructure to the Newton County Water and Sewer Authority (WSA).
The BOC will write a letter of intent that allows the WSA to move forward in hiring an appraiser to review the county’s water assets.
The assets include all physical property such as land, reservoirs, pumping stations and ground water storage tanks, said Mike Hopkins, Executive Director of the Newton County Water and Sewer Authority (WSA).
Hopkins said once the letter of intent is prepared and signed, the WSA will begin to solicit bids from firms to assess the value of the properties. After selecting a firm, the WSA will take their recommendation to the county for approval.
If the county cannot agree with who will do the evaluation of assets, the WSA will not go any further. If the county agrees, the WSA will use the valuation to make an offer on the county’s water assets.
County sole provider of water
The county is the sole provider to nine other whole customers, including the cities of Covington, Oxford and Porterdale, Hopkins said. “Basically,” Hopkins said, “the county puts the water in the distribution system.”
In a presentation to the BOC, Hopkins said bringing the water system under one agency will improve the county’s financial position and frees up county funds for other critical needs. Because the WSA is nonprofit, all profits are reinvested into the system and the authority’s financial stability makes puts them in a strong position to obtain bonds for improvements.
Another benefit, Hopkins said, would be the costs for operating, maintaining and, when needed, expanding the water system would be spread across a larger customer base, increasing from the WSA’s current 24,000 customers to approximately 32,000 customers.
“Ninety-nine percent of the water systems in Georgia don’t have this type of structure,” Hopkins said, referring to the number of entities involved in the system. “It’s too fractured. It’s worked well, but it takes a lot of effort.
“The county is sole provider to nine other wholesale customers,” Hopkins said in an interview with The News. “There are a lot of opportunities for improvement of efficiencies and streamlining management.”
The county would no longer bill the nine different entities for water supplies; instead the WSA would be the billing agency. “The authority has a highly skilled and stable workforce of water professionals, making the system more efficient.”
Letters have already been sent to the different cities and entities that purchase water from the county. On Oct. 3, Hopkins appeared before the Covington City Council on Oct. 3 when Mayor Ronnie Johnston distributed a letter to council members and the city manager, updating them on the proposal.
In the letter to Johnston, Hopkins wrote, “The Authority believes that the transfer of ownership of the drinking water facilities will be a positive action for all wholesale customers of the water system. Having one agency devote its full attention to providing clean drinking water ensures that public health does not compete for resources and expertise with other important services such as roads, parks, and law enforcement.”
The proposed initiative, outlined in an attachment to the letter, stated, “There is an immediate need to make significant and costly investments to the water plants. The sale of these assets would relieve the County of these major costs while providing it with a significant contribution of funds.”
The city council was not asked to take action, only to be aware of the discussions being held between the county and the WSA.
Bear Creek concerns
Hopkins said the topic of the Bear Creek Reservoir comes up frequently when the proposal is discussed. For nearly 20 years, the county has been purchasing land and working towards obtaining permits necessary to build a reservoir on Bear Creek to provide for future water needs. By 2014, over $21 million had been spent on the project. (See “$21 million spent to date on Bear Creek.")
The controversial project was put on hold after the Army Corps of Engineers withdrew the permit application needed to move forward because, stating the county had not justified the need for a new reservoir. (See “BOC suspends all work on Bear Creek Reservoir.")
Hopkins said WSA engineering studies indicated that if “you optimize the reservoir we have, another reservoir wouldn’t be needed until past 2040. We’d just concentrate on the two treatment facilities and the two [existing] reservoirs.”
Because the WSA is required to buy 100 percent of its non-emergency water supply from Newton County, Hopkins said, concerns were raised. “We have no control over deficiencies and problems with the treatment plants,” Hopkins told The News. “I don’t want to make the all to [Shire] or General Mills and say the county can’t get us enough water to [supply] you.
“When you’re dependent on another entity to make improvements and upgrades to meet your customer demands, that’s a concern,” he said.
Sale could help county’s money woes
Hopkins also said purchasing the county’s water system could help the county’s economic problems.
In August, the BOC approved a $54 million budget for the 2017 fiscal year. Shortfalls in the anticipated revenue stream from the county’s solid waste led to department heads being instructed to reduce their proposed budgets to 2016 numbers and reduction of appropriations. (See “BOC needs more than $2 million to balance budget,” and “Newton County approves $54 million budget.")
Hopkins said there is concern that, due to the county’s financial problems, the repairs and upgrades to the system could create problems like those happening in cities like Flint, Michigan or Charleston, West Virginia. “You can’t let [the systems] get to the position where they’re failing,” Hopkins said. “It can take anywhere from 16-months to two years to do a large project; smaller projects may take a year.”
The length of time spent on a project includes time to design it, the Environmental Protection District oversight, bidding out the project, construction and final EPD inspection. Hopkins said if the initiative moves forward, the WSA will do assessments on the plants and reservoirs “so we can find out what needs to be fixed. Hopefully, by sometime in November, we’ll have an idea of what needs to be done at these plants.
“We’re trying to get these things done so we don’t have problems in the future,” he said.
Seeking a win win solution
Hopkins said this is the early stages of the initiative. “This thing will morph and change over the next two months ... We’re all charting new territory here. It’s a pretty unique deal. There needs to be a win for the county, a win for the Authority, a win for the entities and a win for our customers.
“I don’t want people to think this will be done by the first of the year or even at the end of the next year,” he said. “We’re trying to work this out so it’s really a win for all – and that will take time.”
Hopkins said that the WSA’s intent “is to sit down with each of the cities and hear their concerns and questions and try to get answers for them.”
If, he said, the appraiser hired to determine the value of the water systems comes back with a value that is more than the WSA can afford, “we’ll back out,” Hopkins said. “I’m not going to ruin a financially sound organization just to say we own the supplies in water. We’re trying to determine if this is going to work.
“If it doesn’t work out for all of us, I would hope everyone would say ‘no,’” Hopkins said. “What we’re asking for now is to look and see if we can make this more efficient and control cost. I think that’s what the customers are asking for – lower costs and more efficient waste water.
“I’m excited about the possibility,” he said.
