New Kent leaders ponder how to financially address water issues after receiving more information

New Kent County leaders will have to make a decision on how to handle the dwindling water supply in certain parts of the locality.

During the Aug. 11 regular meeting of the board of supervisors, New Kent Public Utilities Director Mike Lang spoke about water issues plaguing the Brickshire subdivision and New Kent Highway systems. During Friday morning’s work session, Lang returned to address and discuss ways and provide more details on the situations.

Lang opened by commenting that the Brickshire elevated storage tank and connecting waterlines were operating at 36 PSI (pressure per square inch). Normal operations should see operations at 60 PSI, with 20 being the minimum to function. He added that precautions and a design for a $10.25 million replacement project was 90 percent complete, with bids for the project hopefully going out in December. Lang added that there weren’t any suitable alternatives to get around the project.

Regarding the New Kent Highway waterline running from Pomeroy Park to Quinton Elementary School, the 3.- mile proposed project design has been completed. The 20-inch wide pipe spanning that distance would cost $5.5 million to construct. As an alternative, replacing the Cary Road well would come with a $1 million tag, but the project would only keep the life cycle of the situation functional for another 13-15 years.

Lang cited several scenarios to assist with bringing in revenue to assist with the project without using DNCF (Do Not Carry Forward) funds. While many of the projects wouldn’t bring a lot of additional funding, the public utilities director said adjusting commercial water/sewer rates to the highest tier (meaning the more you use, the higher rate) combined with residential irrigation rate to the highest tier combined could produce upwards of $155,000 annually. An example of this was that a minimum bill would be $21.08 per 1000 gallons applied for commercial use, while residential irrigation would see $8.81 per 1000 gallons of use, essentially costing the user anywhere between $0-53 impact on their bill.

One of the least popular options brought before county leaders was reinstating the Bottoms Bridge Service District tax levy. Currently, the counter covers the $950,000 bill. Even a slight adjustment of one cent per $100 would bring in $12,500, meaning a five cent tax rate would be needed to equal one percent of the user fee revenue.

Although rezoning was an option as it would provide the opportunity for offers, District 1 representative and New Kent Board of Supervisors chairman Thomas Evelyn spoke about the complications that could cost.

“Rezoning would affect public schools, safety, and more,” he commented, speaking on how to find ways to garner more revenue for the projects. “As a board we have to look at the whole picture.”

“When I got here, it (Bottoms Bridge Service District tax) was eight percent,” chimed in District 4 leader Ron Stiers. “We worked it and got it down to zero percent for two years, and now, it’s back up to four percent.”

Lang said in order to not borrow money from the bank, he would look at reducing the minimum cash balance that the public utilities budget operates on. The public utility budget is a separate entity from the county budgets, and according to the public utilities director, they try to keep at least 50 percent on hand.

“Having 10 water systems is like running 10 food trucks,” Lang said. “It’s going to cost more to run them than one or two. It doesn’t matter if you have 32 or 5,000 customers, those things have to be done [to operate them.]

Representatives from Davenport and Company, the county’s financial advisors, spoke of additional options to fund the project. One option would be to enter into the Fall VRA Pool. Currently, the county is obligated to $23.5 million in projects in the current fiscal year, and any financing of the water projects would make the county fall below their reserve policy. In addition, any dipping into the restricted dollars under bond covenants would take them out of compliance resulting them to add cash back into it next year to remain compliant. The VRA Fall pool is non-binding, with the county being able to put in any amount of money they want in order to participate for upcoming projects. Representatives also added that the county’s growth for the next five years is moving faster than expected, meaning utilities and systems are going to be needed at a faster rate. And while the county has held the same rates over the past few years, operating costs for the CIP (Capital Improvement Plan) has grown by 25 percent.

“This is a lot of information,” Evelyn said.

Stiers chimed in with a question on the possibility of splitting the projects.

“Is it a possibility to defer the New Kent Highway project a year or so?” the District 4 asked. “If so, that could save us $5.5 million.”

“Yes,” Lang responded. “But it is still taking a risk because Bottoms Bridge is still growing. That risk increases every day.

“While if we have a catastrophic pump failure, we got everything in backup,” the public utilities director added. “But we still need to look at it.”

County leaders will only have a couple of weeks before heading to a public hearing regarding entering into the VRA Fall Pool.

“When we advertise that number, it’s going to be high,” Evelyn said, mentioning the funds needed to cover the projects. “I don’t want people to be shocked when they see it.”

A public hearing is scheduled for Sept. 8 for the county to make a decision to enter into the VRA Fall Pool and if so, what type of contribution they will give.