The Foxfire Village Council finally got what they have been asking for: a full house.
More than fifty residents showed up at a Thursday, July 25 public meeting to hear Moore County Public Works Director Randy Gould present the County’s proposal to buy Foxfire’s water system.
Council members have been mulling over the idea since February, but the County is urging them to make a decision by August 6, in order to roll the Foxfire water project into a much larger expansion of the County's water sources, and to pay for it all with a zero-interest loan from the state.
There's a September 30 deadline for that loan application, and lots of engineering work and approvals to be done between now and then.
Planning for the Future
To put water system proposal in context, Councilman Steve Durham opened the meeting with a brief history of the Long Range Planning Committee that was created in 2009 to develop a long range plan for the village and address future growth, infrastructure, governance, and financial viability.
In addressing the water system, Durham said the committee identified three specific needs: analyzing the current water system, assessing future growth and the Village's ability to continue to manage its own water system, and identifying the necessary steps to reduce the potential of a catastrophic event.
Water source studies conducted by Hydrostructures, PA in 2007 and 2008 recommended that the Village consider another main water source, preferably tapping onto Moore County.
“After reviewing all the data, and given the strong recommendation by Hydrostructures . . . the Long Range Planning Committee recommended in 2012-13 to integrate its water system with Moore County,” Durham said.
'Time is Short'
Appearing at his second public input session on the proposal, Moore County's Gould told the Council and citizens that it is time to make a decision.
“This presentation is an accumulation of work that has taken place over long period of time. Time is short,” said Gould. “The trigger has got to be pulled now in order to move forward and take advantage of this financial opportunity.”
Looking to meet its own future needs for water, Moore County plans to buy into an expansion of the Harnett County Water Plant, which will provide an additional one million gallons of water a day at a reduced rate. The County also plans to drill three new wells on Linden Road.
Gould is working against the clock to meet a tight deadline to submit an application for zero percent interest financing through the State Revolving Fund of the NC Department of Environmental of Natural Resources (NC-DENR).
Moore County’s proposal to serve Foxfire Village would involve laying a twelve-inch water main down Foxfire Road, cross under Hoffman Road and jog over to the Foxfire water tank.
Gould would like to add the estimated $1.1 million cost of that project to the County's larger financing application. Hence the need to move quickly.
“The projects funded must be ready to proceed, including receiving all permits, land easements by September 30," Gould said. "Our contracts state that designs must be competed by September 1.”
That means the Council must make a decision by early August.
Radium Levels Always a Concern
Gould provided the County's perspective on why the merger makes sense for Foxfire.
The Village already has high levels of radium in some of its six active wells; the radium concentration is reduced by blending the output of those wells with water from other wells.
“Radium is a key concern in ground water," Gould said. "It generates from rock and is basically in the ground. Some wells have high levels and some do not.”
“There have been twenty-two radium violations since 2008 in Foxfire," Gould continued. "Blending is required, and some are at the regulatory limit."
Looking at the future demand for water in the Village, Gould said it is expected to increase by roughly one-third by 2040.
“In 2011, the average day’s demand equal 76,000 gallons,” Gould said. “In 2040, the average day usage is estimated at 105,000 gallons.”
The County is well-positioned to help meet that demand, given its plan to drill three new wells along Linden Road.
“The three wells are strategically located to help serve Foxfire as well,” Gould said.
Gould laid out the basic parameters of the proposal:
• Moore County will pay for the construction of a water supply main to the Foxfire Village elevated tank.
• Moore County will absorb the existing debt owed by Foxfire Village and has the right to refinance.
• Moore County will take ownership of the elevated tank and distribution system, but not the wells or well sites.
• Moore County will operate the existing wells until the construction of the new facilities is complete.
• Foxfire will be required to abandon the wells at their own cost.
• Until cost of connecting Foxfire the County water system is recouped, Foxfire water rates will remain as is at current levels -- which are higher than rates paid by other County customers. If the County raises rates for all its customers, Foxfire rates will increase by the same amount.
• Upon repayment of the County's construction loan, the Foxfire Village rates will become the same as the Moore County’s customer rates.
• Foxfire will keep current retained earnings in the water fund.
“If Foxfire Village wishes for Moore County to provide water service, then it would be best to be included in the NC-DENR funding application for the overall water supply project,” Gould concluded.
If the Village wants in, Moore County must amend a design contract with an engineering firm to add the design of the Foxfire Village water main at the August 6 Board of Commissioners meeting. The design work must be completed by September 1.
Gould made it clear that the County would continue negotiating with Foxfire if the August deadline were not met. But, the chance to take advantage of zero-interest financing might be lost, increasing the length of time that Villagers would have to pay water rates higher than those paid by other county customers.
A Skeptical Public Responds
Village residents expressed doubts about the wisdom of turning over their water system. Concerns ranged from the loss of future revenue to disagreements about current levels of radium.
One of the most vocal opponents of the proposal was former Councilman Ed Lauer, who once had responsibility for the Village Water system.
Referring to the Hydrostructures studies, Lauer said, “The water study that they are citing is the one that I had conducted. The study was made under the assumption of continued escalated growth. We had over 200 homes built in two years. After it [the pace of construction] went down, it was determined we could survive for 15 or 20 more years with our current system.”
“First of all, let’s make it clear,” Lauer said. “The people of Foxfire are still going to pay $1.2 million to run that line up the road. The point is: you will be an unequal partner in this town’s deal."
Trading Debt for Debt?
Under Gould’s proposal, the County would assume the Foxfire Village Water Department's current debt. But Lauer argued that the Water Fund has reserves on hand that could pay off that debt.
"The water department is an enterprise. It operates off its funds just like a business,” Lauer said. “Those loans were incurred as operating expenses. The water department has never had a problem making its payment. The funds are sitting there that have accumulated, and we have it in our coffers. That money is a false debt, and I wanted to return it on number of occasions."
The Village currently has money in an account reserved for the drilling of a new well. Foxfire would retain that money if they voted to sell their water system.
“We are exchanging a short term debt for a twenty year debt," Lauer said. "If the County rates increase, then we are going to get that increase. You are going to pay -- we are going to pay -- for the next twenty years. I will guarantee the County is going to offer the water [to other customers] up that line. They are going to get customers and profit from it. I want everyone to understand what they are entering in to.”
A Profitable Enterprise
Currently, the Foxfire Water Department turns a profit each month. A percentage of the money goes to pay administrative costs and a portion of the salaries and benefits of the Villages staff.
Councilwoman Leslie Frusco explained one disadvantage of letting go of the water system: “the loss of revenue that presently supports the general fund’s operation budget.”
“A portion of their [Village employees'] salaries and benefits package are allocated to the water department," she added. "I am estimating those costs are around $35,000 to $37,000 each year. The council would have to decide and investigate the employee situation, salary and benefits package, or if there are other ways to cut costs. That is an issue that council needs to address.”
Another disadvantage in the merger would be an increase in tap on fees. Currently, the Village charges $1,450 per tap, while the County charges $1,950.
On the Money
Resident Mary Gilroy questioned the wisdom of making a quick decision.
“This project is being driven by the date, not the project," she said. "The financing is driving the project, and that changes things. When you do things in a hurry and are talking big bucks, things can happen. Once you've signed on the line you are in. Are we okay with what is in this contract?”
Previous work by the Long Range Planning Committee is what makes the option possible, Gould reassured Gilroy: “The only reason we can do this, is that the line has already been designed. If Foxfire doesn’t meet the deadline, everything will happen except that line coming out to Foxfire."
Commissioner Larry Caddell noted that adding the Foxfire project to the County's overall funding application would increase the chances of receiving the zero interest loan.
“We are trying to improve our twenty year plan. It looks better,” Caddell said.
Tardy to the Lectern
“I haven’t been paying any attention to this until I came tonight,” resident Guy Packet confessed before questioning the Council.
“Why would we walk away from infrastructure that we built, paid for, and go in debt for almost $2 million?" he asked. "I realize it’s a headache to manage our own water system, but why is it necessary to change it now? Once you go down this path, how do you get back? Why are we interested in spending -- just to try and save what?”
“There were two water assessments that said we need to find a new well,” Councilman Mick McCue answered. “We don’t have any property and don’t have any guarantee, if we dig a well, there will be water.”
The Village has, in fact, invested in the drilling of several unsuccessful wells in the past decade.
Packet replied, “There is not a guarantee other than we sign on and pay a million bucks. I don’t like the idea.”
The Long Range Planning Committee was not unanimous in its support of a merger with the County. Committee member Mary Anne Lauer said: “This came out of committee, but it was not a unanimous vote to go along with this. It wasn’t even seven to one. This started out as a mandate to study the water coming from one of the surveys we took.”
Lauer addressed the positives of the Village retaining ownership. “The water has always been valuable asset to us. The water system was modernized not very long ago. It helps pays salaries including the one water department’s employee that we have.”
Mayor George Erickson recommended a follow-up Council work session on Thursday, August 1.
“I would suggest if you have other comments to either email them to Lisa Kivett (Village Clerk), or drop them off," Erickson said. "All comments are welcomed to follow up on this meeting and have those available for us to review for that work session.”
Like all Council meetings, the work session will be open to a public. The time and location have yet to be announced.