Sunday, July 3, 2022

Brunswick County leaders talk water infrastructure projects, and where to find $216 million dollars

During a Tuesday District 5 leadership meeting hosted by the North Brunswick Chamber of Commerce, Brunswick County representatives offered updates on its multi-million dollar utility upgrade and expansion plans. Existing financial plans -- as is -- leave nearly $25 million in not-yet-funded costs.

Expansion of Brunswick County’s Northeast Wastewater Treatment Plant will occur to the west of the existing facility. (Port City Daily photo/Courtesy Brunswick County)

BRUNSWICK COUNTY — If all goes as planned, Brunswick County is just a few years from solving sewer and water capacity concerns, and providing water nearly free of perfluorinated contaminants. But it’ll cost $216 million.

Related: Brunswick again asks DEQ for clarity – and funding – for $137 million water infrastructure plans

To address this ambitious undertaking, Frank Williams, the county’s chairman organized a status update in District 5, Brunswick County’s northeastern region.

With permits pending, and contracts not-yet-bid, the $216 million figure is not concrete. However, plans to expand Brunswick County’s water and sewer plants and add on advanced reverse osmosis technology, are well underway.

What it all costs

Brunswick County’s utility plans are being financially bundled to provide the following:

  • A 12-million-gallon-a-day (mgd) expansion at the Northwest Water Treatment Plant
  • A 2.5 mgd Northeast Wastewater Treatment Plant expansion
  • A 54-inch Lower Cape Fear Water and Sewer parallel water main
  • A low-pressure reverse osmosis system outfitted to treat 36 mgd

All four projects combined will cost an estimated $216 million. Last month, the county agreed to engage a bond counsel to manage a potential $120.8 million revenue bond, issued by Baird (a multinational private banking company), to cover the four projects. According to a county contract with the Parker Poe law firm, Brunswick County will pay $60,000 or $75,000 for its bond to be managed (more if the county is approved for a federal loan).

To take on that amount of debt, the county must first prove its financial health to the Local Government Commission. And to do that, Brunswick County hired the utility consulting company Raftelis for $80,737 to conduct a three-part analysis, to study: the county’s wholesale rates, its retail rates, and its ability to issue its proposed bond.

A plant expansion at the North Water Treatment Plant, which was planned before the Cape Fear region’s awareness of perfluorinated compounds in the water supply, will cost an estimated $38.2 million– that’s according to a county update last month. But project presentation this month from CDM Smith, the county’s water projects consultant, shows the expansion will cost $47.5 million.

Reverse osmosis technology, fitted to treat the plant’s expanded capacity at 36 mgd, and a nearly 4-mile discharge concentrate pipeline will cost between $89.5 million — according to CDM Smith’s recent update — and $99.6 million — according to the county’s December numbers.

Sewer costs

For some financial relief, Brunswick County’s sewer situation is mostly covered. When it comes to its $39.1 million Northeast Wastewater Treatment Plant expansion, two other utilities will pick up some of the tab.

Additional capacity is not needed in Brunswick County or in the City of Northwest, according to the engineering firm, McKim & Creed. Leland will be responsible for covering $12.67 million, Navassa’s share is $8.05 million and Brunswick Regional Water and Sewer H2GO will cover $18.38 million, the firm’s Tuesday presentation stated.

H2GO’s spokesperson confirmed Tuesday that the utility will contribute to the plan. But Navassa’s mayor, Eulis Willis, said he does not believe the town has plans to finance the project (Author’s note: more on this development later this week).

According to McKim & Creed, this breakdown of fees is equally shared, in proportion to each utilities’ projected use of the system.

According to a May 2018 interlocal agreement with Leland, Leland’s share will be paid for over a 20-year period. Payments on the county’s revenue bond will be made semi-annually, in accordance with a yet-to-be-determined amortization schedule. But still, the debt would be issued by Brunswick County.

A state National Pollutant Discharge Elimination System (NPDES) permit is still pending for the plant. It’s a dual request: renewal permit with applied expanded capacity.

Currently “in process,” McKim & Creed consultant Tony Bowen said the permit is “likely be approved in 90 to 100 days.” With a design process 60 percent in progress, construction could be completed as early as Aug. 2021.

Water costs

Low-pressure reverse osmosis (RO) technology is the county’s costliest endeavor. By 2022, the county’s “conventional water treatment plant” could be transformed into a facility with “bulletproof technology,” according to CDM Smith project manager Greg Roy.

Pilot testing at the Northwest Water Treatment Plant shows the technology removes 90 percent or more of targeted contaminants. Once contaminants are removed, the county is reliant on the approval of a pending discharge permit to release between 0.7 mgd to 4 mgd of concentrate back into the Cape Fear River. The proposed outfall location is 18.3-miles downstream from the region’s raw water source.

According to the county’s NPDES application, testing showed four out of 280 parameters were identified as being in excess of state standards or protective values in the concentrate solution. These parameters will be adjusted through dilution, the application, submitted in November 2018, states.

“We will meet all regulatory requirements,” Roy said Tuesday. “There’s no doubt about it.”

One bullet point on Roy’s presentation states the North Carolina Department of Environmental Quality (DEQ) has approved discharges for other RO facilities. When asked whether any other utilities in the state have been approved for a project in similar size and scope, a CDM Smith representative cited Dare County. Dare County’s capacity is 5 mgd, sourced from an aquifer. Brunswick County’s project is proposing seven times that capacity, sourcing freshwater from the Cape Fear River.

At nearly $90 to $100 million, initial estimates are inclusive of a 15 percent contingency fee. This projected cost is just a “general idea,” Roy said Tuesday. The presentation showed the county has been selected for a Water Infrastructure Finance and Innovation Act (WIFIA) loan, up to $73 million.

“There are very few projects in the country that have received this funding source,” Roy said. Brunswick County Commissioners voted last month to apply for the WIFIA loan. According to the county’s utilities director, John Nichols, the application has still not been officially submitted. However, Nichols said, barring extreme changes, it’s unlikely the county won’t receive the WIFIA loan.

The county has also applied for another funding stream, a low-interest loan through the state’s Drinking Water State Revolving Fund (DWSRF). However, the DEQ informed the county its approval was unlikely, according to a county summary earlier this month.

But a DWSRF loan isn’t completely off the table. Roy said these funds are still being pursued “aggressively.”

It should be noted that both of these funds would be loans, not grants, that the county would have to pay back, although most likely on a scale of decades, not years.

Outside the proposed revenue bond, the county still has nearly $25 million in ground to cover. County staff are pursuing multiple options, according to Nichols, to secure the remaining $24.2 million.

Lastly, there’s the potential for funding garnered from litigation against Chemours. A lawsuit between the county and Chemours — the chemical company linked to perfluorinated compounds in the river — is still pending.

“There’s probably more lawyers working on either side of that than there are currently people in this room,” Chairman Williams said, to an audience of dozens people.

Though relying on future, potential damages to cover the county’s projects has been discussed, Williams said it’s not a predictable revenue source.

“My budgeting philosophy is — and I think our board’s is — we’re not going to rely on something like that unless we know it’s coming in,” Williams said.


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

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