Packets are being distributed door-to-door condemning the City of Southport’s controversial plans to build its own wastewater treatment plant and leave the Brunswick County sewer system.
The decision has come under fire in recent weeks, despite it being unanimously approved by aldermen back in April. To move forward with the plans, the city had to terminate an agreement with the county to expand its West Brunswick Regional Wastewater treatment plant. The $25-million project would have added 750,000 million gallons per day for the city’s use.
But after reevaluating the expansion with a third-party engineer, the city found it would need more capacity than that in the coming decades. For an additional $440,000, Southport could build its own sewer plant that would provide 1 million gallons a day with the ability to expand.
The city’s plan has been criticized by several candidates in the upcoming Southport elections for not being as cost effective as has been claimed.
The distributed packet included campaign fliers from political candidates who oppose the plant: mayoral candidate Joe Pat Hatem and aldermen candidates David Miller, Eric King and Lowe Davis. Nelson Adams — who was not included — is on the side of a renegotiation with the county.
It is possible Southport could once again change directions and rejoin the regional system. In fact, for ethical reasons, the engineers for the city plant, Hazen and Sawyer, met with county officials last Friday to discuss whether the regional system was a more suitable option for the city. The engineers are reviewing that information and will soon present their conclusion to the city staff.
The State Port Pilot has addressed for accuracy each statement in a flier titled, “Why Southport Should Stay with County’s Sewer System,” that is included with the packets that have been circulating in the community.
There are minor edits for clarity.
“The county’s sewer base rate for residential customers is $31.17 lower (than the city’s).”
This is misleading. It is true the base rate for residential customers in the county sewer system is $31.17 lower — to be specific, it is $39 for fiscal year 2019-20 — however, the base rates for Southport residents would be the same price if the city was still pursuing the county expansion.
The current sewer rates were explained at a budget workshop back in May 2018, during which finance director Melanie Trexler attributed several future increases to the expansion project with the county.
“The city has to get a loan from the state (to build its own plant). This will sharply reduce the city’s ability to get any other loans if — when — we need money to cover other city needs.”
This is misleading. It is true the North Carolina Clean Water Revolving Fund loan will limit Southport’s ability to borrow; however, the city planned to use the same loan to expand the county’s plant.
“The state limits how much you can borrow and the loan to build our own city plan puts us at the limit. It will tie our hands.”
False. The city still has approximately $30 million in borrowing power before it reaches the limit, according to city manager Bruce Oakley and Trexler.
“The county would finance its plant expansion for the City of Southport by taking out the same loan, but it would be the county’s debt, not the city’s.”
This is unclear. A county spokesperson said the county would have been willing to issue the financing for the expansion Southport needed, but the city instead decided to use the state financing it had received. She noted the state would have allowed the county to take the loan out for the city “if that was preferred.”
But Oakley and Trexler said, as far as they knew, the county only offered to take out the loan if the funding fell through or the project exceeded the amount.
The State Port Pilot requested more details from the county regarding these discussions but did not receive a response by press time.
“The city can stay with the county … as a participant (instead of leasing as it has been doing).”
This is mostly true. Southport was leasing capacity until it terminated the contract in the spring. Since then, the city has been paying the county’s standard retail commercial rates.
“As a participant … the city would have ‘ownership rights,’ giving the city a level of control equivalent to the city owning its own independent plant.”
This is mostly false. It is not an equivalent level, simply because the same amount of control would be unnecessary. Participants do not have to operate the facilities or manage day-to-day operations, but they do have some input on decisions affecting rates.
“The city can stay with the county … by (turning its system) over to the county, as many municipalities have done.”
This is somewhat true. Brunswick County did not offer to take Southport’s system over. At the same time, the city did not request the county to take the system over; if it had, the county would have sent a proposal.
The following are listed as “advantages” to staying with county system:
But first, an explanation of the opposing argument: building an independent wastewater treatment plant is said to provide enough capacity to prevent the city from needing another expansion in the next 20 years, which would cost millions more and possibly result in more rate increases. The plan is often referred to as Southport “controlling its own destiny.”
“The county would be liable for spills and subsequent lawsuits, not the City of Southport.”
This is mostly false. The city would be responsible for water distribution and sewer collection systems, and the county would be responsible for transmission and plant systems.
“County utility can issue bonds at AA rating. City cannot.”
This is unclear. Southport could issue bonds, but it hasn’t done so in years. Trexler explained the rating may not be the same as Brunswick County’s.
“The county’s operations and maintenance are lower than the city’s would be … (and are) covered by everyone living in the county vs paid by a small population like Southport’s.”
True. Those costs are lower with the county and would be covered by user fees charged to the county’s customers.
“The county pays a lower cost for materials, such as treatment chemicals because it can buy wholesale in big volume and the city cannot.”
This is unclear. The county provides multiple economies of scale, including chemical purchases and equipment that most smaller utilities have to contract out. It’s possible the city could receive some of the same deals.
“The city owes the county $1,037,975.23 for engineering plans to expand the plant for Southport’s use, back when Southport said it would stay with the county.”
True. These are rolled into the low-interest loan.
“The city still owes the county approximately $600,000 for the pump station on Sandy Lane behind Walmart.”
False. Southport does not owe this.
“The city will be obligated to pay a penalty to the county of $1.6 million for breaking the contract in April 2019. Southport would not have to pay this if it turned the system over to the county.”
False. There is no penalty at this time.