Monday, November 28, 2022

Why did Leland take out a $1.1 million state loan to replace a working sewage pump?

Leland's project description in its loan application to the N.C. Department of Environmental Quality provides no mention of the future Sturgeon Creek Park, planned in the same location as a functioning lift station. Instead, Leland submitted a narrative that claimed the lift station, which has no recent recorded issues, is at risk of flooding and could contaminate Sturgeon Creek.

Leland has been approved for a $1.1 million state loan to relocate a lift station away from Sturgeon Creek. The Department of Environmental Quality has not provided evidence that the lift station has had recent issues. (Port City Daily/Courtesy N. C. Department of Environmental Quality)
Leland has been approved for a $1.1 million state loan to relocate a lift station with no recent issues; the loan will be used to move the pump station from Sturgeon Creek to make way for a planned park. (Port City Daily/Courtesy N. C. Department of Environmental Quality)

Update, Sept. 7, 9:15 a.m.: According to information provided by N.C. Department of Environmental Quality, state inspections have found no recent or major issues at lift station #14. At the time of publication, Port City Daily had not yet received evidence from the state regarding whether or not the lift station was functioning properly.

LELAND — The town of Leland intends to spend $1.1 million, secured by a low-interest state loan, to relocate a sewage pump to make way for a future park. Relocating the pump, known as a lift station, will cost the town at least $1.4 million in total and could Leland sewer customers’ rates.

Though the town has indicated the reason for the relocation is to prevent contamination in Sturgeon Creek, N.C. Department of Environmental Quality has not provided any evidence of recent issues at the lift station and Leland admits there have been no recent spills.

RELATED: DEQ to loan Leland $1.1 million to relocate flood-prone sewage station

In the town’s loan application submitted to the state, Leland failed to mention the planned park. Instead, language in the town’s application mirrors other action-related documents pertaining to lift station #14, which states the need to “prevent contamination in Sturgeon Creek” from “possible sewer overflows.”

But in nearly every infrastructure committee meeting in which the lift station was discussed over the last two years, the town’s reason for relocation is clear: the lift station needs to be moved to make way for Sturgeon Creek Park.

Low-interest loan

Leland first attempted to secure a grant through N.C. Department of Environmental Quality (DEQ) to relocate the lift station in 2017, but was denied. Later the same year, the town was cleared for a low-interest loan for the same project. The DEQ’s State Water Infrastructure Authority approved the $1,161,055 relocation in July 2017, at a low-interest rate of 1.9 percent.

In its loan application submitted in 2017, Leland fails to mention the planned Sturgeon Creek Park as the reason to relocate lift station #14. (Port City Daily/Courtesy N.C. Department of Environmental Quality)
In its loan application submitted to the DEQ, Leland fails to mention the planned Sturgeon Creek Park as the reason to relocate lift station #14. (Port City Daily/Courtesy N.C. Department of Environmental Quality)

When Port City Daily asked whether the state was aware of the planned park when it granted approval for the project, Cathy Akroyd, DEQ spokesperson, did not directly answer, instead provided a February 2018 engineering report that mentions the park; that report was submitted after the state approved Leland’s project. Ackroyd had initially stated in July that the project was approved based on environmental concerns.

Following repeated inquiries beginning Aug. 13, at least three DEQ spokespeople have been asked repeatedly to provide evidence that lift station #14 had recorded issues, as well as whether relocating a working lift station for a planned park met the state’s loan requirements. While other issues were addressed in responses, the DEQ has still not provided a direct answer to either question.

Authorized by the North Carolina Clean Water Revolving Loan and Grant Act of 1987, eligible projects that can receive state funding include:

  • construction of wastewater treatment works
  • wastewater collection items
  • water supply systems
  • water conservation projects

While Leland’s contamination narrative appears to fit the state’s eligibility criteria, it’s unclear if moving a working system for a park, would.

Leland’s assistant town manager, Niel Brooks, said that both narratives are true, and both will benefit the public. He acknowledged that while the lift station does not have any current issues, relocating it away from Sturgeon Creek offers the town open space for the park and environmental benefits.

Sturgeon Creek Park

Lift station #14 is seated just 350 feet from the bank of Sturgeon Creek. It’s been in operation since 2004, with no recently reported issues. Now, it’s located within Leland’s 34-acre site where a future park is being planned.

Plans for the park include constructing a North Carolina Wildlife Resources Commission boat ramp, an elevated classroom, nearly a mile of trails, a playground and exercise stations. For two years, the town has been acquiring land on either side of the Sturgeon Creek bridge for the park, according to its 2018-19 fiscal budget.

In addition to land already obtained, Leland plans to continue to acquiring land as it becomes available through next year.

Last month, Council approved a $104,901 contract to receive environmental consulting services at the future park site. With some structures recently burned during fire department training activities and others scheduled for demolition, hazardous materials need to be disposed of.

The loan

At 1.9 percent interest, the DEQ’s loan protects the town from dipping into its Utility Enterprise reserve funds or borrowing from a bank at a higher interest. After Leland received initial approval for the loan, it agreed to pay SEPI Engineering $246,700 to work on the project.

In SEPI Engineering’s executive summary, submitted to the DEQ in February 2018, language that references both of the town’s reasons was included.

“The Town has decided to move the existing lift station with a like-for-like replacement for two reasons: to provide a passive greenway on the site and to increase the distance between the replacement lift station and Sturgeon Creek,” the report states.

If completed, the project could increase sewer rates for current customers by at least 7 percent, SEPI Engineering’s report states.

However, Leland does not anticipate the relocation project will raise rates. Missy Rhodes, Leland’s assistant town manager, said SEPI Engineering’s report used a standard table to predict what may be needed.

In Leland’s Local Government Commission application, submitted three months after SEPI Engineering’s report, states the town does not intend to increase rates.

“Again, the Town had never considered this project to increase utility rates as the current growth, based on past data and future population increases, was anticipated to handle the additional debt payment,” she wrote in an email.

According to the town’s timeline, DEQ will not release funds to the state until next year. The state must still review the engineering firm’s bid package in November, with an anticipated approval date of March 2019.

Update: This article has been updated to include additional information provided by the town of Leland regarding a potential rate increase as a result of the project.

Leland has been approved for a $1.1 million state loan to relocate a lift station away from Sturgeon Creek. The Department of Environmental Quality has not provided evidence that the lift station has had recent issues. (Port City Daily/Courtesy N. C. Department of Environmental Quality)
Leland has been approved for a $1.1 million state loan to relocate a lift station away from Sturgeon Creek. The Department of Environmental Quality has not provided evidence that the lift station has had recent issues. (Port City Daily/Courtesy N. C. Department of Environmental Quality)

Send tips and comments to Johanna Ferebee at johanna@localvoicemedia.com

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