The Town of Williamston, the Martin County Water and Sewer Authority (MCRWASA), and Martin County are dealing with the challenges of the loss of a major industry, Parkdale Mills. On April 12th, Parkdale Mills announced it will shut down its Williamston facility by June 10, 2017. County Manager David Bone said, “Our hearts go out to the employees and families affected by this news. The plant closure also has ripple effects throughout the community – affecting other local businesses, the general local economy and the local tax base.”
Parkdale Mills also was the largest water customer for the Town of Williamston, having used 35.6 million gallons of water last year. Losing such a large water user negatively impacts the Town of Williamston, and subsequently, MCRWASA and Martin County water customers, as well.
“Williamston and the County put an aggressive retention incentive on the table for Parkdale, which would have netted the company significant savings in terms of water expenditures and future taxes,” said Jason Semple, President and CEO of Martin County Economic Development Corporation. “However, there are many factors that large corporations consider when consolidating operational footprints and maximizing profits. Often, many of these factors, logistics costs for example, are beyond the control of the local community.”
Martin County and the Town of Williamston are partners in MCRWASA. Additionally, Martin County and the Town of Williamston are MCRWASA’s only wholesale customers. MCRWASA treats water and sells water to Martin County and the Town of Williamston on a wholesale basis.
The MCRWASA wholesale rate is incorporated into the Town of Williamston and Martin County retail water rates. The town and county have additional operating expenses and debt service payments, which have to be considered in developing the retail rates. In turn, the utilities charge the retail rate to their customers – the water customers of the Town of Williamston, Martin County Water District #1 (Oak City area) and Martin County Water District #2 (Bear Grass / Farm Life areas).
An inter-local agreement approved in 2009 helps govern MCRWASA. A policy in this agreement specifies that the wholesale unit cost of the water is based on the usage of each member from the prior year.
The budget for the MCRWASA water treatment plant is mostly comprised of fixed costs. When water usage goes down, the unit cost goes up, thereby increasing the cost to customers. The loss of Parkdale Mills’ 35.6 million gallons of water usage will impact the water rates for the Town of Williamston usage in 2017-18 and will begin to affect MCRWASA (and thereby Martin County Water Districts #1 and #2 customers) in 2018-19.
MCRWASA, the Town of Williamston and Martin County are trying to keep water rates as low as possible, but it is a huge challenge. MCRWASA was formed and the MCRWASA water treatment plant was built to address the Central Coastal Plain Capacity Use Area (CCPCUA) Rules. Through the CCPCUA Rules, the State of NC required Martin County and the Town of Williamston to diversify water resources and to reduce their dependence and use of water from the Cretaceous aquifer by up to 75 percent. After the study of several alternatives, including multiple groundwater alternatives, a Roanoke River water treatment plant was selected in 2009 as the supply alternative. This facility and related projects cost about $27 million.
“While we had about $8.45 million in grants involved in the water treatment plant, we also have about $19 million in loans involved in this project. We have a 40-year US Department of Agriculture loan for this project, and the debt service payment is about $812,000 per year, which represents about 45 percent of the MCRWASA annual budget”, said David Bone, MCRWASA Chairman and County Manager of Martin County.
Williamston Interim Town Administrator Brent Kanipe added, “When we lose a big water customer like Parkdale Mills, a higher burden is placed on the remaining customers. These remaining customers have to pay a higher percentage of the debt service, as well as operating costs, which are mostly fixed costs.” Faced with the loss of Parkdale water sales, the Town has taken measures to reduce the 2017-18 budget for water and sewer operations by reducing or postponing certain capital expenditures and operational needs in order to hold the necessary increase to a minimum. Those measures allowed us to reduce the required increase by approximately 30 percent.”
The MCRWASA wholesale water rate (the rate charged by MCRWASA to the Town of Williamston and Martin County Water Districts #1 and #2) was approved at the May 25th meeting of the MCRWASA Board of Directors. The 2017-18 wholesale rate (effective July 1, 2017) will be $5.15 per 1,000 gallons. The 2016-17 wholesale rate was $4.75 per 1,000 gallons. Due to the loss of Parkdale Mills, the wholesale rate is expected to be higher in 2018-19.
The Town of Williamston recently approved a 2017-18 retail base water rate of $18.65 and an additional charge of $9.25 for every 1,000 gallons of water for in-Town customers. This represents an increase of $1.15 from the current base rate and first 1,000 gallons used. Town of Williamston Districts 1 and 2 will have a retail base water rate of $27 and an additional charge of $11.25 for every 1,000 gallons of water used. This represents an increase of $1.25 from the current base rate and first 1,000 gallons used.
Martin County approved a retail base water rate of $42 (which includes 1,000 gallons) and $8.50 for every additional 1,000 gallon increment. This represents an increase of $2 from the current base rate.
The Williamston and Martin County rates are not the same, because they have different operating expenses. Martin County Water Districts #1 and #2 are newer utilities and have more debt, due to the construction of their water lines and infrastructure. As an older utility system, the Town of Williamston has relatively little debt.
David Bone stated, “We ask for everyone’s patience and understanding as we deal with this challenge. Unfortunately, our options are limited.”
MCRWASA Vice-Chair and Williamston Mayor Pro Tem Al Chesson added, “We know our water rates are high. We pay the water bills, as well, and have explored many alternatives to reduce the cost to provide this service. We have been trying to be proactive and manage this situation the best we can. Losing a large water customer exacerbates the situation – we have little choice but to raise water rates in order to meet debt obligations. What we really need is a large industry that requires large volumes of water to locate in our area, so we can help spread-out the costs.”