Greenville Utilities Commission has taken the next step toward an eventual merger of its water and sewer systems with the Town of Bethel’s systems.
GUC’s Board of Commissioners unanimously approved a management and maintenance agreement with the town at its Thursday meeting.
The agreement, which the Bethel Board of Commissioners approved several weeks ago, allows GUC to start assessing the town’s sewer system for repairs and improvements and take over the operation, maintenance, upgrades and improvements to the town’s water and sewer systems. The assessment begins immediately.
“This is the first of many steps we’ll be asking you to take regarding Bethel,” General Manager/CEO Tony Cannon said.
Once the assessment is complete, GUC will use funding Bethel received from the North Carolina Department of Environmental Quality — Division of Water Infrastructure to begin making the repairs. The commission and town also will enter into a merger agreement. The Greenville City Council must also approve the agreement.
The ultimate goal is for GUC to take over the water and sewer system and eventually bring the water and sewer rates of Bethel in parity with GUC’s rates, Cannon said. That will take time because Bethel still is paying off debts from earlier improvements to the systems, he said. At no point will existing GUC customers be asked to bear the costs associated with the Bethel system, said Chris Padgett, GUC chief administrative officer.
Padgett said Bethel will pay GUC $250 a month for management and maintenance services. The town will maintain ownership of the system until a merge agreement is signed.
The town also will be responsible for billing, payment collections, connecting and disconnecting customers, preparing required reporting and paying vendors until the merger agreement is signed.
The town will be responsible for regulatory reporting and violations and Bethel and GUC will maintain appropriate insurance coverages. GUC also will record the cost of materials, supplies and equipment installed on Bethel’s systems, Padgett said. It will be included in the financial assessment calculations and incorporated into rates paid by Bethel customers or reimbursed by the town if the merger agreement isn’t executed.
Padgett said it’s unlikely the merger will fail because Bethel’s leaders want out of the water and sewer business.
GUC has treated Bethel’s wastewater and supplied its drinking water for many years.
The enterprise funds that operate the town’s two systems have struggled financially, resulting in high rates for customers.
GUC and Bethel officials have been in talks since 2016 about taking over the town’s water and sewer systems, which have about 750 connections. In 2017, the two entities entered into a formal agreement to explore feasibility of a merger.
Last year, the state Division of Water Infrastructure awarded Bethel more than $4.5 million to assess its wastewater system inventory and make improvements to both systems.
“The state has been very clear to Bethel and GUC through this process that the reason Bethel received such a high dollar amount of grant only funds is to facilitate the eventual merger of Bethel systems with Greenville Utilities,” Padgett said.
The board also took several other actions on Thursday.
Commissioners approved a request for an easement from the Pitt-Greenville Airport to install a sanitary sewer line to North State Steel. The request is subject to approval by the Greenville City Council and Pitt County Board of Commissioners.
North State Steel, which fabricates steel products, opened in Greenville in 1984. It also has a second location in Louisburg.
The business, located on Gum Road which is off Old River Road, wants to expand its facility, which will require it to connect to a sewer system instead of remaining on the septic tank it currently uses, GUC attorney Phil Dixon said.
GUC will need the airport to grant an easement so a sewer line can be extended to the business. It’s estimated the project will cost $122,000.
GUC has agreed to partner with North State Steel and the Pitt County Development Commission to jointly fund the project,
GUC’s estimated share is $137,000, North State Steel will pay $60,000 and the development commission will pay $25,000.
“Is this normal ... for us to participate in these costs for a private industry or is this an incentive-type payment?” Commissioner Tommy Stroughton asked.
Cannon said it is an incentive. GUC worked with the city on facilitating the expansion. GUC has done this on other economic development projects.
Jobs will be created, Cannon said, but he didn’t remember the number of jobs.
“I do not recall the discussion,” said Greenville City Manager Ann Walls, who is a voting member on the GUC board. “The city is not participating in the extension of the sanitary sewer grant.”
Cannon confirmed the city isn’t participating. He said it was either Councilman Will Litchfield or Mayor P.J. Connelly who brought GUC together with North State Steel to discuss the project.
Commissioner Minnie Anderson asked if nearby residents would be able to connect to the sewer line, since they also have septic tank problems. Cannon said no.
Cannon said GUC agreed to participate because North State Steel likely would leave Pitt County if it couldn’t get sewer service.
The board agreed to purchase property on the north side of Tull Road — about 1,400 feet northwest of the intersection with Worthington Road — for $25,000. The property is part of GUC’s plan to relocate its high-pressure gas facilities from the middle of Greenville to outer boundaries.
GUC has been working on the project since 2017. It originally budgeted $9.5 million for the total project but reduced that amount to $5.2 million this year.
The board approved an amendment for its fiscal year 2019-20 budget that decreased its operations and expenditures by $1.73 million.
The budget, which ends on June 30, originally was $260.9 million but has been modified to $259.1 million. The changes stem from increased purchased power expenditures related to last summer’s heat, decreased revenues brought on by COVID-19, decreased interest revenue from investments and bond proceeds and other variables.