The Fannin County Water Authority and the City of Morganton put the finishing touches on a contract last week, where the county will purchase water from Morganton for an upcoming project.
During the county water authority meeting last Wednesday, Morganton Mayor Mike England said his city’s draft of the contract borrowed heavily from the Blue Ridge water contract with the county, approved earlier in the meeting and previously approved by the Blue Ridge City Council. Fannin County Water Authority Director Mike Queen, though, had some concerns about the Morganton draft. One of Queen’s concerns was a surcharge.
“Since electric rates and cost of chemicals are subject to fluctuation not within the control of the city of Morganton, a surcharge will be added to the base rate of the cost of either increases ,”
Queen read from the draft of the contract. The contract goes on to say that the increases are based on 2012 electricity and chemical rates. England said the last time Tri-state EMC issued a rate increase, Morganton’s electricity rate increased 25 percent. If this should happen again over the course of the contract, he said, Morganton will charge the county 25 percent of 48 cents.
The rub for the county, though, is finding a way to avoid passing the cost on to its new customers.
“is (that) I don’t want to come right out of the chute with a new water system and…start raising rates.”
According to the discussion, the county would pay the surcharge only when Tri-State EMC increased prices or when chemical prices increase. Morganton currently pays approximately $1000 a month for chemicals, England said.
Queen also noted the water rate.
“At $3.75 per 1000 (gallons of water),”
“We’re paying one of the highest rates in the state of Georgia.”
He went on to say the deal with Morganton wouldn’t work if the county had to make loan payments for the project.
“(So), why would you up the $3.75 (for the electricity and chemical surcharge),” he said, “When it’s the highest rate in Georgia when you’re making money?”
England said the future of the economy is uncertain, due to the outcome of last month’s election and certain legislation, suggesting the possibility of hyper-inflation.
“If that (hyper-inflation) happened,”
“we would have to be able to do something to deal with that type of situation, because that would affect a whole lot more than just chemicals and electricity.”
According to the conversation, the contract will be modified to reflect a more equitable means of addressing electricity and chemical increases. Although, not specified, the two parties seemed to favor an annual assessment.
Another concern for the county was a reimbursement fee for replacing meters. The draft of the contract states that if Morganton requests a meter test and the meter needs to be replaced, Fannin County will reimburse Morganton for the cost. Both parties agreed, however, to omit this item from the contract.
In a conversation with FYN, Chief Land Development Director Marie Woody explained the contract is part of a $500,000 project, where the county will match $166,000. The project will provide water for low income families on Hidden Circle and Ridge View Road off of Highway 515.
Fannin County Attorney Lynn Doss said she would make the changes discussed in the meeting. For his part, England said he would forward the changes to Morganton’s attorney, Herman Clark, for approval. The Morganton City Council is expected to vote on the revised contract at its December 19th meeting.