Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, June 13, 1990 TAG: 9006130400
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: MARK LAYMAN STAFF WRITER
DATELINE: LENGTH: Medium
"The cost is continuing to grow year after year," he said. "We have to move forward."
In 1986, county voters approved a $15 million general-obligation bond issue to pay the county's share of what was intended to be a regional reservoir. But since then, Roanoke and Salem have backed out, leaving county taxpayers to foot the bill - even if Roanoke and Roanoke County consolidate.
That bill will total more than $53 million, County Administrator Elmer Hodge said Tuesday.
The reservoir, designed to supply up to 23 million gallons of water per day, will cost $33 million. A water-treatment plant will cost $9 million. Storage, pumps and transmission lines will cost $6 million.
Other costs - such as construction management, a water-rate feasibility study and a debt reserve fund - total $5 million.
Hodge said the county will sell water- and sewer-revenue bonds to raise the additional money needed for the project. Revenue bonds, which don't require voters' approval, could be repaid without an increase in real-estate taxes.
The county's financial consultant - Wheat, First Securities Inc. in Richmond - is studying the multitude of options for such a large bond sale.
An analysis by Wheat, First Securities shows the debt payment would range from $2.9 million to $7 million per year, depending on how payments are structured.
By raising its utility tax from the current 6 percent to 12 percent, the maximum allowed by law, the county could bring in $1.8 million a year in new revenue. The utility tax now is charged on gas, electric and telephone bills; it could be added to water bills. And once the county had its own water supply, it would save up to $360,000 a year in surcharges it pays on water purchased from Roanoke and Salem.
"With those two alone, we can go a long way toward financing this project," Hodge said.
Water-connection fees and rates could be raised to cover the rest of the cost. On Tuesday, the supervisors went along with Hodge's recommendation to hire a consultant to recommend whether a rate increase is necessary.
Of the four supervisors who attended the meeting - Harry Nickens was absent - Lee Eddy was the only one to express any doubts about the reservoir.
"I fully support the need for a project of this sort," he said. "[But] I'm reluctant to give carte blanche approval to go ahead full-tilt" without the chance later on to closely examine its costs and benefits.
Eddy was assured there would be many chances to do that before next spring, when construction bids are to be awarded.
The supervisors decided earlier to go ahead with construction of a reservoir providing 23 million gallons of water per day even though the county now uses only 6 million to 7 million gallons per day. Studies have projected the county will need 17 million gallons of water per day by the year 2040.
The county's permit from the U.S. Army Corps of Engineers allows construction of a 23 million-gallon-per-day reservoir. That won't cost much more than a 17 million-gallon-per-day reservoir, Assistant County Administrator John Hubbard said.
"Not to take advantage of the full capacity of the site and the permit we have would be a mistake," he said.
The extra capacity will allow the reservoir to be a backup for Roanoke's Carvins Cove reservoir and for Salem, Hodge said.
And even though the county - like the Roanoke Valley - isn't growing fast now, that might change, Robers said.
The first phase of the project includes construction of an 8 million-gallon-per-day water-treatment plant. That's enough to meet the county's immediate needs. As water demand increases, another treatment plant will have to be built. Salem's water-treatment plant in Glenvar also can be expanded.
Construction should be completed by the fall of 1993, and the reservoir should be in use in 1995.
The reservoir will be built off the Roanoke River near the Montgomery County line. Water from the river will be pumped into the reservoir. The treatment plant will be downstream in Glenvar. When needed, water from the reservoir will be released into the river and withdrawn at the treatment plant.
by CNB