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Town of Lockhart Urged to Take Action on Water and Sewer Systems in Report

Daniel Prince

Rate increases, possible partnership with City of Union Utilities recommended

Clay Helms with KCI Technologies presented the results of his firm’s feasibility study for the Town of Lockhart’s water and sewer systems at last week’s Union City Council meeting. The study found that the town has approximately 242 service connections. The average utility bill for water and sewer in the town, based on 3000 gallons of usage, is $94.32, compared to $73.55 for the City of Union. The town usually moves 6% of the general fund to the water and sewer fund each year to make up for revenue shortages. The amount will increase to 10% in the next budget year to provide additional funds. Emergency repairs in recent years have drained the town’s reserve funds, which makes it difficult to meet local match requirements for grant funding. The town relies on the water and sewer fund as its primary revenue source for operations, as it does not receive revenues from county or state taxes. The town spends $85,000 a year purchasing water from Browns Creek Water Company, and they pay $117,000 to a company named TESI for the town’s wastewater treatment. Helms noted that TESI has some outstanding DHEC violations and is also looking to sell the wastewater treatment plant, making it likely that a new company would raise the rates, as he noted TESI has not done a good job of maintaining the plant.

The group offered two alternatives for long-term viability. The first is to raise rates to account for future rate increases for water or sewer services, as well as to build reserve accounts to fund emergency repairs and local match funding requirements for grants. The group said that rate increases will eventually become a burden to the town’s customers and will not provide significant additional revenue. They said that raising rates to the required levels may not be feasible based on the average income levels in the town.

As with the Town of Carlisle, the group said the most feasible alternative would be to partner with the City of Union and Union County to operate and maintain the town’s water and sewer systems. The city would be the best suited to do that, but they would require help from the county, as the burden of ownership of the system would go to the city with little to no benefit to the city. They said a study of the overall operational costs of the town would need to be completed to verify that the town can viably operate from general fund revenues. If not, a franchise fee percentage could be added to the water and sewer bills for each customer so the town would have an additional income stream.

WBCU News will continue to follow the developments in the Towns of Lockhart and Carlisle and report on any decisions made as to the futures of their water and sewer systems.

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