THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Thursday, July 6, 1995 TAG: 9507060363
SECTION: LOCAL PAGE: B1 EDITION: FINAL
SOURCE: BY FRANCIE LATOUR, STAFF WRITER
DATELINE: CHESAPEAKE LENGTH: Long : 101 lines
The Chesapeake City Council is poised to borrow up to $78 million to upgrade the city's water treatment system, and city officials say that neither they nor citizens have much choice in the matter.
What voters may be able to decide is whether to back bonds that could end up saving them more than $5 million on the work.
For their money, city officials say, Chesapeake residents will get a water treatment system that meets federal standards. As a bonus, the modifications are supposed to get rid of the salty taste that plagues the water supply whenever weather forces brackish water up the Northwest River.
On Tuesday,council members probably will vote to ask that a referendum be held to authorize borrowing money to bring the Northwest River Water Treatment Plant into line with the Safe Drinking Water Act.
If authorized, the referendum will be held as part of the Nov. 7 general election.
Whichever way the vote goes this fall, the city will be pushed deeper into debt at a time when the council is demanding new levels of financial restraint.
Localities have until July 1, 1998, to comply with the stricter, sweeping amendments to drinking water laws passed by Congress in 1986.
Without the kind of ``full-faith'' collateral that comes from a citywide mandate, budget officials said, Chesapeake would have to borrow more money and repay it at a higher interest rate - pushing the $72.5 million cost to $78 million.
Budget Director Claude A. Wright likened that $5.5 million gap to the difference between a mortgage, which uses the property itself as collateral, and a loan, based on an unsecured line of credit, like a credit card.
``The mortgage costs less in the end,'' Wright said, ``because there is less risk to the investor so the interest charged is lower.''
That was the same message expressed by engineers from Black and Veatch, a Missouri-based consulting firm hired to draw up a financial plan for water rates.
In a work session with council members last month, the firm projected that public utility revenues would have to rise by 6 percent to cover the work if voters support financing for the plan. If the referendum fails, those same revenues would have to jump between 8 percent and 12 percent.
Current rates for water and sewer combined are $3.47 per 1,000 gallons. For the average household, that combined bill is $53.41 every two months.
As part of the 6 percent revenue increase, the average utility bill would rise to $55.51; an 8.8 percent increase would produce a $56.12 bill; and a 12.17 increase would push the average combined bill to $58.52.
Funding the project also will force city officials to reconcile two competing pressures - the need to meet federal law, and the crush of growth and increasing debt.
Last year, the city's outstanding debt totaled about $193 million. Since then, the state's fastest-growing city has borrowed $147 million more in bonds, hoping to bring its major services in line with the rate of expansion.
And the city will soon begin borrowing the $76.9 million approved by voters in the November 1994 road bond referendum - the largest referendum in the city's history.
``All local governments are trying to operate as efficiently as they can,'' said City Manager James W. Rein. ``But there are forces that make that more difficult in terms of making large expenditures for federal requirements.''
Those forces have hit localities like Chesapeake in areas ranging from federal wetlands preservation restrictions to stormwater demands.
Rein said it is important that citizens see the spending as more than just commands from on high.
``We need to try and educate the public and explain that the improvements will improve the quality of water,'' Rein said.
About $63 million would pay for an additional filtering process to reduce potentially harmful chemicals by at least half.
Chemicals such as trihalomethanes are created when chlorine is used to rid the water of bacteria and remove odors.
The byproducts exist in very small amounts in Chesapeake water - about 75 parts per billion.
The new federal law requires that the city reduce the amount even more.
In 1986, Congress passed strict amendments to the laws, requiring the Environmental Protection Agency to identify and set safety levels for at least 25 compounds every three years.
The Safe Drinking Water Act was originally passed in 1974. The law requires suppliers of public water to test for dozens of chemical and bacterial pollutants, and to notify customers if their water violates these standards.
Meeting the federal standard will actually mean a loss of about 3 million of the 10 million gallons of water Chesapeake treats every day.
The filters in the new system are so efficient at removing impurities, including the dissolved salts, that some of the water can't get through and is left as a brine-like concentrate that the city will have to dispose of.
To make up for the lost water, the city would add four new wells: three along Battlefield Boulevard and one inside the plant itself.
Also included in the bond would be about $1.3 million to help build the Lake Gaston pipeline; $5.6 million to expand pumps that draw raw Portsmouth water, allowing an increase from 2 million to 5 million gallons per day; and $2 million toward building a 1 million gallon storage tank at Cavalier Industrial Park to improve fire protection in Deep Creek. MEMO: Staff writer Scott Harper contributed to this report. ILLUSTRATION: Color photo
City Manager James W. Rein
by CNB