Archived Story

Fund balance floats WWTP

Published 7:29am Tuesday, June 17, 2014

GATESVILLE – An economic investment project that has sparked years of pro and con debate is now leading Gates County to invest additional taxpayer dollars.

At their meeting here last week, the county’s Board of Commissioners voted 3-2 in favor of a measure to add $686,200 to an ongoing project that provides sewer and wastewater treatment to an area along US 158 between Central Middle School and Eason’s Crossroads, to include Merchant’s Commerce Center.

The additional money will come evenly ($343,100 each) from the county’s general fund and water fund.

Prior to voting on whether or not to approve the measure, the commissioners listened to an explanation from county finance officer Sandy Pittman. She said the money was need to cover increased costs that are estimated for the Wastewater Treatment Facility project.

“According to Municipal Engineering, we need an additional $686,200 to finish this project,” she stated.

Pittman pointed out cost overruns on some of those line-by-line items and cost savings on others. The savings come in the form of legal work on the project ($5,200), engineering costs ($68,300 under the projections) and $6,800 in advertising costs.

On the flip side, the grant planning and administration costs increased by $19,500 over the original budget; construction costs are up by $547,000 and the land acquisition (57 acres needed to expand the treatment plant’s sprayfield) is $200,000….money that was not included in the original budget for the project (it was built into the construction costs).

That led to total cost overruns at $766,500. By subtracting the savings, it left a $686,200 hole to fill. Pittman noted there are no grants in place to refund that $686,200 to the county.

“I understand that Municipal Engineering is currently researching if there any grants available, but at this time there are no grants in place,” Pittman said.

Commission Vice Chairman Jack Owens inquired if any of the existing grants for this project could be used to help offset the drawdown from fund balance and the water department. Pittman answered by saying all the grants received for the project have already been accounted for.

“These are additional dollars,” said Pittman, referencing the $686,200. “This is increased costs to the county.”

“So, correct me if I’m wrong, but the total cost to the county for this private project is now at $1,457,695.25; that is county money, non-refundable,” noted Commissioner Billy Felton.

“Yes, those are the projected costs (to the county),” Pittman answered.

As far as the overall construction costs ($1.54 million to include roughly $140,000 in contingency funds), Commission Chairman Henry Jordan stated, “the grants that we have, we’ll be able to utilize those funds to cover this once we reach the point where we can be reimbursed for them. What we have now will not cover (those costs). If we get a grant at the end, get it later, it will help cover those costs.”

The total project, which includes work already completed in Phase 1 (installation of sewer lines, lift stations and pump stations), is now estimated at $3,607,695.25. To date, the county has been awarded $2.15 million in grant funding ($900,000 from the EDA; $700,000 from the NC Rural Center; $350,000 from CDBG; and $200,000 from the Golden Leaf Foundation).

“Anything beyond those grants are county dollars, not unless we receive additional grants which we can use to reimburse the general fund and water fund for the dollars we moved to support this project,” Pittman said.

Owens motioned to approve budget amendments 53 and 53-A, which moves $686,200 in county funds to the wastewater project. Commissioner Kenneth Jernigan offered a second and the ensuing vote was 3-2. Felton and Commissioner Linda Hofler cast the dissenting votes.

After the vote was taken, two county citizens asked permission to be heard on this issue.

“I pay taxes in this county, and I want to know where this money is going,” said Earl Rountree.

Jordan replied, referencing the $2.15 million in grants the county received for a sewer project that would support economic development at the Merchants Commerce Center, a private development located across from Gates County High School.

“We have another engineering company and there are some differences in what their projected costs will be and we have to have them covered in the budget before we can move forward with the next stage of this project (the wastewater treatment plant),” said Jordan. “Some of this cannot be discussed (publicly) because there’s only so much that can be disclosed at this point in time on what certain businesses may do there.”

“Are we talking about work that is being done now or work that’s already been done that we owe for,” asked Sherwood Eason, a former county commissioner.

“Some of it is work already done; some will be covered in the next phase,” Jordan answered.

“It’s looking like to me that Gates County will never recover what we’ve put out there,” Eason noted. “Sometime there comes a time to bail out. For businesses to survive there has to be people. There has been a trend in this county for years where we go out of the county to shop. I don’t want to be pessimistic, but there’ll never be but so much business in Gates County, no matter how hard you try to get them here.”

Jordan again stated that the current time is not conducive to, “get into a public discussion about certain costs that are projected business costs.”

Felton disagreed, saying he felt all information should be made public.

“The citizens, the taxpayers need to know how and where this money is being spent out of their pockets,” he stressed.

Jordan noted that the current sewer/wastewater system owned and operated by the county now serves Gates County High School, Central Middle School, Gates County Community Center, the newly opened Gates County Emergency Management Center (at the old prison) and the NC DOT facility.

“It’s not just for private development,” Jordan remarked. “When you look at what’s been spent, the county has put some money in and if we don’t go forward we will lose that investment and even more because we won’t be able to tap into the grants we already have. We’ve used a $350,000 grant on this project. If we don’t go forward we’ll have to pay that back.”

“Phase 1 already takes into account covering (the sewer needs) of the schools, the community center, the library and the Credit Union (the latter two already in operation at the Commerce Center),” said Hofler.

“I understand that, but we’re nearly at capacity (80 percent) at our wastewater treatment plant and the state requires us to have a contingency plan (for future growth),” Jordan said. “Our contingency plan is what we’ve done to acquire the new sprayfield.”

One of the projected businesses, on the record, that is looking at building within the Merchants Commerce Center is an assisted living facility. That business was originally planned to be open by now, but financial issues at the state level (Medicare/Medicaid funding) have delayed the project.

“The state legislature froze the money that assisted living facilities statewide receive from the Medicare/Medicaid pot of money,” interim Gates County Manager Ken Windley told Roanoke-Chowan Publications in an interview following last week’s meeting. “That caused all assisted living projects on tap in the state to be placed on hold, including the one planned for Gates County.”

Windley added those funds are finally freed up, and the entity building the facility in Gates County has promised that the construction drawings are nearly complete and they hope to move forward with the project, now expected to open in the late summer or early fall of next year.

Additionally, Windley said the delay in that project accounted for the rise in the construction costs by roughly a half-million dollars.

There were county dollars ($440,000) expended on the project prior to a project budget put in place. Of that amount, roughly $336,000 came from the general fund and water fund. Included in that was $12,000 for the expansion of the drainage pond for the new library project.

The original project budget was at $2,527,450, which included $1.42 million just for the wastewater treatment plant, ownership of which was transferred to the county by the state. That plant was constructed years ago to serve the now closed GatesCountyCorrectionalCenter.

“We basically inherited a mess there and we’re now trying to fix it up,” Windley said, adding that the North Carolina Department of Environment and Natural Resources (DENR) did not like the slope of the land at the plant.

Windley later told Roanoke-Chowan Publications that the wastewater treatment plant, when transferred to county ownership, was rated at being able to handle 25,000 gallons per day (gpd).

“Apparently, DENR had not inspected that plant recently and when they did they lowered the capacity to 15,000 gpd,” he noted. “Once we complete the treatment plant project and make all the improvements there, to include purchasing 57 acres of land to expand the sprayfields (to which treated wastewater is applied), we’re hopeful that it will be rated at 50,000 gpd per DENR’s approval.”

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