DOBSON — County taxpayers will pay more than a half-million dollars in interest for a project to extend sewer services to the Interstates Water and Sewer District.
Another question concerning the district remains unanswered.
By way of a unanimous vote this week, the Surry County Board of Commissioners authorized finance officer Sarah Bowen to enter into a financing agreement with BB&T Bank.
Bowen told commissioners the 2-percent interest rate offered by BB&T Bank was the lowest of the three lending institutions which offered bids to finance the project. Throughout the course of the next ten years, the county will pay a total of $525,000 in paying off the loan.
In March, commissioners voted unanimously to increase the maximum portion of the $5.9 million project which can be financed from about $4.2 million to $5 million. The move was made because the county may opt to forgo using about $780,000 in Department of Commerce grant monies which would be tied to promises of job creation in the district.
Commissioners indicated the decision to consider not using the Commerce funds is based on being burned in a similar deal involving Cody Creek Restaurant south of Dobson.
In October the county filed a lawsuit seeking $203,754 from Cody Creek to recoup what was given back to the state. The Department of Commerce demanded grant monies be returned when job-creation benchmarks weren’t met.
According to the documentation Bowen presented Monday to commissioners, the county will make a total of 20 payments, two payments per year beginning in October. The county will pay between $597,000 and $507,000 per year for the 10-year duration of the loan.
The county is scheduled to receive the $5 million loan immediately, and the money is placed in a separate account for use in the sewer project.
Board Chairman Buck Golding, who cast one of the two dissenting votes in the board’s approval of the project, said other expected cash flow for the project has begun to trickle in.
“We have the first $200,000 from Mount Airy in-hand,” said Golding, after noting the city had pledged $1 million toward the project in five annual $200,000-installments.
The city will provide the sanitary sewer service to the district, which includes the properties along N.C. 89 from the city limits to the I-77 and I-74 interchanges.
The sewer project under way in the district follows a project in which the county ran water services from the town of Dobson to the district in 2010.
Monday evening County Manager Chris Knopf reminded commissioners they have a decision to make.
“I still have high hopes the board will make a decision soon on who gets the interstates water (business),” remarked Knopf.
At the board’s retreat in February, Knopf told commissioners a decision soon needed to be made as to whether the water services in the district would be handed over to Dobson or Mount Airy.
Dobson currently provides the service, including the water running from customers’ spigots as well as billing services and maintenance services.
Knopf stated both municipalities have shown interest in providing the water service to the district. However, the city would force the county to pay the $270,000 associated with infrastructure updates to ready the district to receive its water from Mount Airy.
If commissioners opt toward Dobson, no such updates would be necessary, since Dobson is already providing water in the district. However, an interlocal agreement between Mount Airy and Dobson would have to be forged to allow Dobson to share water-usage information with the city for the purposes of sewer billing.
Knopf has indicated he must soon know the wishes of commissioners in order to prepare his recommended budget for the upcoming fiscal year.
At the retreat, commissioners seemed to indicate they were leaning toward handing the system over to Dobson.
Monday night Commissioner Larry Phillips responded to Knopf’s remarks with, “I’m ready to make that decision right now.” However, the board took no action on the matter.
Andy is a staff writer and may be reached at 415-4698.