Harnett County Public Utilities

Transcription

1 Harnett County Public Utilities Funding for Regional Water and Wastewater Projects UNC School of Government Environmental Finance Center Capital Finance Strategies January 24-25, 2007

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3 Departmental History In 1968 a comprehensive water study was completed. In 1975 a County wide bond referendum was held/ failure by 4:1 margin In 1976 the County formed the first Metropolitan water district /bond referendum held, passed 3:1 margin. The district provided water to the Towns of Lillington, Coats, and Angier. This original district consisted of approximately 500 County water customers. In 1983 the County completed a second comprehensive water study and the decision was made to create County water and sewer districts. In 1983 the County created a utility department.

4 Departmental History HCDPU s customer base now stands at approximately 37,000 water customers and 8,000 wastewater customers. Presently the department has grown its system to include 9 County water and sewer districts. HCDPU s major infrastructure currently includes an 18 mgd regional water treatment plant that serves approximately 100,000 people in Harnett, Wake, Johnston, Cumberland, and Moore Counties. Other significant water infrastructure includes 17 elevated and one ground storage tank, 16 booster pumping stations, and approximately 1,800 miles of water mains. HCDPU s major wastewater infrastructure includes five wastewater plants with a current treatment capacity of 10 mgd, 66 sewer lift stations, and approximately 500 miles of wastewater mains. HCDPU net assets total approximately $78 million.

5 HCDPU Debt Profile Total Debt is currently $40,929,444 GO Bond Debt is $17,095,000 (42%) Installment Debt is $23,834,444 (58%) Debt to Equity Ratio is 53% Debt Service as a % of Revenues is 38% Debt Coverage Ratio (net revenues/debt service) is 1.19

6 HCDPU Debt Profile Originally almost all of our debt was GO Bonds. We used USDA Rural Development to finance our water district construction. USDA provided partial grant funding and allowed 40 year amortization on the bond financing. Increasingly more and more of our debt became installment purchase as we built out the districts and diversified our asset construction to include more wastewater and water transmission upgrades. Current projections show that almost all of our new debt will be financed through revenue bonds, which do not require voter approval and encourage full cost pricing of utility services. In other words, revenue bonds remove a lot of the political uncertainty involved in proposed rate increases.

7 Regional Project Financing Harnett County and the Town of Fuquay-Varina agreed to construct a 15 mile wastewater interceptor and upgrade the North Harnett Regional WWTP by 5 mgd in The total cost of the project will be approximately $45 million. The agreement delineated joint payments for all design and preliminary cost and laid out payment responsibilities for the construction. Original funding was sought through the State s bond initiative in The next slide will present a breakdown of total project funding.

8 Regional Project Financing Harnett/Fuquay WW Project Revenues Harnett Bank Loan (will become revenue bonds) $2.05 million Harnett State Bond Grant $3 million Harnett State Revolving Fund Loan $15 million Town of Lillington State Bond Grant $1.334 million Town of Angier $2.167 million Town of Fuquay State Revolving Fund Loan $17.5 million $41 million

9 New Regional Partnerships New 50 year water supply contract awarded in October 2006 to Harnett County and the Fayetteville PWC from the Department of Defense. Each entity will supply up to 8 mgd to Fort Bragg. Harnett s construction portion of the contract consists of an 8 mgd capacity upgrade to the Harnett Regional WTP and the construction of 18 miles of 24 waterline with a 1 million gallon elevated storage tank. Harnett s construction portion of this contract is estimated to total $29 million. This project is funded entirely by the Department of Defense. Harnett will issue revenue bonds and DOD will make the annual debt service payments.

10 New Regional Partnerships Planned Harnett/Chatham County project in which Chatham will purchase 6 mgd capacity in the Harnett Regional WTP. A 24 water transmission line would also be constructed to the Chatham County line from Harnett s existing storage and booster facility in southern Wake County. Total project cost is estimated to be approximately $13 million.

11 New Regional Partnerships DOD also awarded the 40 year wastewater treatment agreement for Fort Bragg to Harnett County. HCDPU will construct a 10 mgd upgrade to a 5 mgd regional wwtp on the Harnett-Cumberland line. HCDPU will also construct a 36 gravity interceptor from Bragg to the plant. The construction will total $28 million for the wastewater portion and again will be financed through revenue bonds and repaid by DOD annually.

12 New Regional Partnerships Harnett is the design stages of a 18 to 26 mgd capacity upgrade of the Harnett Regional WTP. Proposed regional participants in this upgrade include: Fort Bragg (DOD) 8 mgd Chatham County 6 mgd The Town of Holly Springs 2-8 mgd Johnston County 2 mgd This will be another example of a project with a myriad of different financing types involved.

13 Regional Interconnects

14 Sustainable Sandhills Influence

15 Summary Regionalization is here to stay in the water and wastewater industry. Municipalities and Counties must continue to find innovative and sound financing methods to meet the challenges and reap the cost savings of regionalization. As Rick Warren stated in his bestseller The Purpose Driven Life, It s all about relationships. Cultivate those relationships and regionalization becomes a lot easier for everyone involved.