BOC signs resolution to finance sewerage project for Blackjack

If all goes as planned, homes and businesses in the Blackjack Community will soon be connected to the City of Lincolnton's sewerage treatment system. Pictured signing a loan/grant resolution for the $3.5 million project are: (l-r) Kathy Ross, area specialist with USDA-Rural Development; Lincoln County Commission Chairman Walker Norman; and Britt Hammond, county attorney.

Plans to hook up the Blackjack Community to the City of Lincolnton's sewerage treatment system are well on the way to becoming a reality.

The Lincoln County Board of Commissioners signed a loan resolution for the project at a called meeting held Thursday, March 20, in the courtroom on the second floor of the courthouse.

Among those in attendance were Kathy Ross, area specialist with USDA-Rural Development (RD); Roger Jenkins, also an area specialist with USDA-RD; Jerry Hood, vice president of Engineering Management, Inc. (EMI), the county's engineering firm; Chip McGaughey, project manager for EMI; representatives from the Blackjack Community; and Roby Seymour, director of the county's water department.

"This project is vital to the residents of the Blackjack Community because, as a result of the rocky ground, the sewerage is not filtrating into the soil," said Seymour. "This being the case, the sewerage has no other option but to seep to the top of the ground.

"And with the wet winters we've been having, the children in Blackjack have not been able to play outside without having to deal with sewerage.

"We are delighted that the financing for this project has fallen into place, and we're ready to get underway," stated the director.

The project will be funded by a Rural Utilities Service (RUS) loan not to exceed $784,000, a grant from USDA-RD in the amount of $2,186,000, and a $500,000 Community Development Block Grant (CDBG), which includes $30,000 in local, matching funds.

The USDA-RD grant/loan is comprised of 75-percent grant and 25- percent loan.

In her comments on cost overruns, Kathy Ross said, "The county needs to move as quickly as it can on this project, so the estimated cost will be as close to the actual cost as possible."

The resolution signed by the commissioners allows the county to continue with proceedings to issue water and sewer system revenue bonds to repay the loan; it also represents the county's official acceptance of the USDA-RD grant.

The loan will be repayable over a period not to exceed 40 years, with the first payment due one year following the closing date on the loan. This will be an interest only payment; however, the 13th payment will be a fully amortized installment of both principal and interest.

Using an interest rate of 4.375 percent for planning purposes, it was estimated that the county's monthly payments would amount to $3,497.

In conjunction with this, the county will be required to establish a bond reserve fund and deposit 10 percent of the monthly principal and interest installment into the fund ($350 per month).

The county likewise has to set up a reserve account for short-lived assets. It has been estimated that the water department must save a total of $100,000 to replace pumps in the future. USDA-RD expects the county to fully fund this reserve account by depositing $6,667 in it annually.

Moreover, in order to provide adequate revenues for sewer operating expenses and debt service requirements, the county's sewerage rates will be raised to $21 for the first 1,500 gallons (minimum) and $5 per 1,000 gallons over that amount. The rate is presently set at $10 for the first $1,500 gallons and $3 per 1,000 gallons over the minimum.

Therefore, if a customer uses the normal residential average of 4,700 gallons per month, his sewer bill would come to $37.50, based on the new rates.

The $3.5 million project calls for the county to run approximately eight miles of force main down the Augusta Highway to collect the sewerage from Blackjack and transport it to the City of Lincolnton's wastewater treatment plant.

In April of 2006, the city agreed to accept 45,000 gallons of sewerage per day from 140 potential customers in the Blackjack Community; however, the 20-year agreement does not constitute a guarantee by the city that it will provide sewerage treatment capacity over 45,000 gallons per day.

Concerning compensation for the city, it will charge an infrastructure or impact fee of $1.20 per 1,000 gallons of sewerage discharged to the city. In addition, there will be a treatment charge of $1.27 per 1,000 gallons. This fee will be adjusted annually in accordance with the Cost Construction Index or the actual per gallon construction cost experienced by the city.

During the meeting, engineers Jerry Hood and Chip McGaughey had the opportunity to address the commission.

In his remarks, Hood said, "It has been a pleasure to work with everyone on this project. It's a great project. We started working on it nine years ago, and now we look forward to implementing it."

"I appreciate USDA-RD pulling all of this together in such a timely fashion," stated McGaughey. "I know the citizens of the Blackjack Community will be appreciative as well."

Once the project has been bid out, it will take from six to nine months to reach completion.

The next regular meeting of the commission will be held Thursday, April 10, at 6 p.m. in the courtroom.