Water plant debate keeps on flowing

It doesn’t look as if controversy surrounding the city of Petersburg’s water system project will be going away anytime soon.
Last week, city council members heard again from residents who oppose all, or parts, of the $10.7 million project.
Opponents appeared during a Monday public hearing called to approve paperwork connected to $7.7 million in project bonds.
Using the hearing to restate their opposition to the project were residents Bob McCalley and Phyllis Cole. Also speaking in opposition was resident Crystal Summers, who was at the meeting to talk about traffic problems on Lee Street.
Cole and McCalley are among project opponents who recently filed an appeal to the higher rates. The state Public Service Commission has agreed to hear the appeal, thus delaying a decision on the new rates.
All three speakers said higher water rates connected to the project will create hardships for residents already feeling the pinch of tough economic times.
Additionally, McCalley and Cole hinted council members may not have been fully informed about project expenses, specifications and its need.
The bond resolution was adopted on a 4-1 vote. The lone opposing vote came from council member John VanMeter.
VanMeter has steadfastly voted against the project since it was first suggested several years ago.
A dozen people attended the hearing. Although only three of them spoke up during the public comment period, many of the others are known to oppose the project.
The hearing’s main speaker was Vince Collins, a representative of the city’s bond counsel, Steptoe and Johnson. He told residents and council members the city got a good deal on interest rates to be levied on money borrowed for the project.
“It is a very good package ... no question about that,” explained Collins.
The city is paying 0 percent interest on $5.37 million, plus 2 percent for $2.39 million in loans. The loans are repayable over 20-30 years.
Saying he didn’t want to be drawn into any political discussions for, or against, the project, Collins offered several observations:
• The city’s debt service on the new project’s loans would amount to $27,000 to $30,000 a month if the project goes ahead.
• It would be cheaper to do the project all at once, rather than in pieces over a longer period of time.
• All water systems require periodic improvements, as well as rate adjustments.
• The city has done a “great job” of finding grants and low-interest loans for the work. Part of the costs will come from a $3 million grant arranged for the city by Rep. Alan Mollohan. That grant has been extended until Dec. 30, 2010, in part due to uncertainty over the water plant project.
• The city shouldn’t undertake the project if the existing plant meets water quality standards, as well as customer demand.
• It would likely take 2-3 years to redesign, finance and permit a different treatment plant.
• There are no guarantees the city would get lower prices if it decided to rebid the project. At the time bids were opened, city officials were dismayed that bids came in over their initial estimates.
• New water rates are a “big jump,” but that should come as no surprise in light of the city’s already low prices.
Collins said the city has three options when it comes to the project. The first is proceeding as planned. The second is to ask for new bids. Finally, he said the city could attempt to negotiate lower prices from the current bidders.
“I’m just the lawyer here,” Collins joked. “I don’t make up (public) policy.”