West Pelzer commits to 40 year agreement

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With Greenville Water

By Stan Welch

During a special called meeting Monday (Dec. 16) West Pelzer Town Council voted to accept a proposal by Greenville Water to purchase capacity to insure the Town’s future capacity, after representatives of the utility addressed several concerns town officials had.

Greenville Water has been touring the area, pitching their proposed buy-in offer to the various municipalities. Based on the original proposition, the town could buy 100,000 gallons per day for the next century, at a cost of $254,000, or 300,000 gallons per day for $762,000.

If that amount were purchased, or reserved, Greenville Water would finance the amount at the following terms: $762,000 for 5 years at 3.5% = $13,535 per month, or $762,000 for 10 years at 3.5% = $7,535 per month

The 300,000 gallons per day was based on the historical max per day for the Town which was 290,000 in 2008. That calculation was one of several concerns that Town attorney Carey Murphy raised. Mayor Peggy Paxton agreed emphatically that the 290,000 gallon maximum figure is inaccurate. “We average less than 90,000 GPD.”

Murphy had also expressed concerns that the purchase of additional capacity in the future would be restricted to 250,000 GPD increments. David Bereskin, of Greenville Water, assured the Council and Murphy that smaller increments could be negotiated.

He explained that if, for some reason I the future, the Town’s smaller purchases of capacity pushed GW beyond the ability of their existing facilities, then West Pelzer would be required to purchase an additional 250,000 gpd.

Bereskin also urged the Council to be deliberate in their decision, saying that the buy-in proposal was not “some end of the year clearance. These figures will be good for some time.” The offer to sell capacity in advance is Greenville Water’s strategy for adapting to DHEC regulations changing the licensing for utilities to draw water from lakes and reservoirs. It allows GW to more accurately predict and reserve the capacity that it will need to meet future customer demand.

After more than an hour of questioning and discussion, Council voted to approve the preparation of a contract including two key elements. First, the term of the agreement would be for a forty year period, with two consecutive thirty year extensions, unless one or both parties chose to terminate.

The second element would call for a ten year loan from GW, which would finance the buy-in cost at 3.5%. According to the figures produced at Monday night’s meeting, the combined cost of the buy-in, along with other associated costs would still come out slightly cheaper than simply continuing the current customer relationship with GW.

At the end of the loan term, the Town’s savings on the cost of their water would be substantial. As Mayor Peggy Paxton said “If we can get this deal, and save a little right away, and then in ten years, really cut our costs, why wouldn’t we do that?”