This good news emerged during the Monday afternoon meeting of the Moore County Board of Commissioners, along with a comprehensive report on the potential for developing a water district for Pinehurst and environs.
Sitting as the East Moore Water District Board, the commissioners voted unanimously to authorize establishment of a budget for the second phase and to provide about $300,000 for initial expenses to be reimbursed to the county.
“I know the people in East Moore are surely looking forward to hearing this news,” said board Chairman David J. Cummings after hearing from Community Development Di-rector Tony Patnode and Allen Hart, area specialist with the Rural Development agency of the U.S. Department of Agriculture.
Hart told the board that the county can expect a $4.9 million low-interest loan and a $2.7 million grant from USDA-RD. Added to that total is $205,183 in tap fees to be assessed of future customers of the second phase.
Patnode advised the board that the reimbursement issue is already addressed by the resolution adopted about three years ago for Phase I. He said that resolution should remain in effect for the second phase.
The $300,000 will be advanced to the East Moore Phase II project to pay for such expenses as engineering services and administrative details. Once the loan, grant and tap fees are available, the county will be reimbursed from the East Moore Water District budget through the sale of bond anticipation notes.
Accelerate Project
County Manager Steve Wyatt said the resolution is on file and its availability would enable the county to accelerate the project.
“They ran out of funds last year before we got our application in,” Patnode said.
Hart reviewed the process to be followed before the county can begin construction of new water lines. The process is complex, requiring a number of federal and state permits and certifications in such areas as the environment, provision of a drug-free workplace and equal employment opportunities.
Commissioner Michael R. Holden made the motion to authorize allocation of the funds from the county to the water district. Commissioner Virginia W. Saunders made the second.
The second phase extends the water district into a much larger section of the East Moore Water District. Phase I has been operational about two years.
East Moore voters approved a $16 million bond issue at the polls before work began on the first phase.
The report on the prospects for a Pinehurst water district was received without comment other than an expression of appreciation to Patnode for his work.
The item was on the Monday agenda as a presentation, and no action was required.
Pinehurst District Different
Unlike East Moore and the prospective North West Moore water districts, a district for Pinehurst would be created from an existing system, presently owned and operated by the county.
Patnode said that state law allows a county to designate any area of its jurisdiction as a water and/or sewer district. Municipalities are usually excluded unless they wish to be covered by the district.
However, establishment of a Pinehurst district would come with disadvantages as well as advantages.
One disadvantage would be loss of district revenues to the county system. Formation of a district would also isolate the system, thus lowering the financial security and borrowing power of the remaining subsystems, the report shows.
The district would have the advantage of retaining all revenues from within the district. It would also allow for establishment of an advisory committee to provide input to the district management.
Clearly, formation of the district would deplete the county’s utilities’ system. Pinehurst water taps account for 68 percent of all funds collected by the county’s Public Utilities Department from water taps. Pinehurst generates 81 percent of all tap and impact fees.
That would leave other parts of the county system dependent on tap and user fees paid only by their customers and future customers.
The county water system also serves Seven Lakes, Vass, Niagara and Hyland Hills as well as other outlying areas.
Management Contract
Such a district apparently would have the option of contracting with Public Utilities for management of the system, and that fee, based on previous percentages, is estimated at more than $3.3 million a year. The management fee pays for such things as salaries, benefits, professional fees, repairs and operational expenses. It would climb with future growth.
The district would be required to assume existing and future debt for capital improvements and would pay for bulk water usage.
During the 2003-04 fiscal year, the county spent $1,253,900 on system improvements, most of which went into the Pinehurst service area.
The largest item in that budget year was $950,000 for an elevated water tank erected in Pinehurst’s Cannon Park. The county also spent $91,500 for a new well and another $81,000 for rehabilitation of six existing wells. Other funds were spent for spare pumps at lift stations, GPS locators and updated software to assist in computer mapping of infrastructure, a sewer line camera, a new utility truck with service body, three small pickup trucks and four new computer stations.
After the meeting, Patnode said that the management fee is designed as a break-even figure, covering maintenance and operational costs. It would not provide any profit figure to pour money into capital improvements.
The report shows that the county system would lose some of its efficiencies if a separate district were formed.
Patnode says the county charges a management fee to the East Moore Water District and will follow the same pattern with the prospective North West Moore Water District. He says the management fee for Phase I of East Moore is $47,000 a year and will increase with development of Phase II.
The usual reason for forming a district is the availability of long term low interest loans, such as the USDA-RD funds made available in East Moore. A Pinehurst district might not be eligible for rural funding but other grants might be possible and bonds could be sold.
Pinehurst voters have already approved a bond issue, an action taken two years ago in anticipation of the village’s acquisition of utilities from the county. That acquisition fell through last year when village and county leaders failed to agree on a purchase agreement.
