Lamar to vote on water system repair loan
By Samantha Lyles, Staff Writer, slyles@newsandpress.net
Lamar Town Council met Monday, December 12 and discussed the possibility of taking out a low-interest loan to help fund repairs and upgrades for their municipal water system.
The town has been purchasing the entirety of its municipal water supply from the Darlington County Water and Sewer Authority since February of 2016, when the second of Lamar’s two water wells was shut down by SC DHEC due to the discovery of trace radium.
Town Council member Mike Lloyd, who oversees the water and sewer system, detailed the skyrocketing water costs this switchover incurred, noting that Lamar’s water system normally brings in around $9,000 per month and their biggest monthly bill from DCWSA was around $13,000. While those bills are shrinking as Lloyd and town workers locate and repair system leaks, the situation has been deemed untenable in the long-term.
Lloyd explained that the town’s water system was its most reliable source of revenue, with adequate billing to make the system self-sufficient and also pay for maintenance of the sewer system. He noted that Lamar’s old system was able to produce 1,000 gallons of water for around 75 cents, while purchasing that same amount of water from DCWSA costs about $2.73.
To get back in the water supply business, council is considering applying for a loan from USDA Rural Development to cover costs not funded by grant monies and other funding sources. Lamar has already secured $200,000 from RIA (South Carolina’s Rural Infrastructure Authority) and possibly another $467,000 in state funding for their water system project. That state money is contingent on showing some sort of forward motion, such as applying for a USDA loan.
Mike Hanna of Hanna Engineering presented council with six different project packages that would address a number of crucial issues, including the need for a new water treatment plant, a new well, and the overdue painting of both water towers. Hanna recommended an option which would dig a new water well on the opposite side of town from the old wells (avoiding the areas where radium was detected), construct a new treatment plant, install a new control valve, and paint water tanks located on Pearl Street and near the Grooms Building on Cartersville Highway.
This plan would cost $2,747,000 in total. If Lamar receives the RIA and state monies, that cost would drop to $2,080,000. Hanna said that Lamar could reasonably expect to qualify for a 50-percent Rural Development loan with an overall grant of 62-percent, meaning the town would have to incur monthly debt service of at least $2,800. The best case scenario of a 25-percent RD loan with an 81-percent grant would bring monthly debt service down to $1,409 per month, but Hanna said the odds of qualifying for this optimal loan are rather slim.
Hanna presented council with projections over a 50-year period comparing the cost of buying DCWSA water with the cost of a 50-percent loan to get Lamar back in the water production business. With a 3-percent CPI factored in on both scenarios, continuing to buy water from the county would cost almost $14 million, while the long-term loan would cost an estimated $6 million.
Mayor Randy Reynolds said that, for him, the issue boils down to which option will put less of a burden on town residents. Lloyd said that while he wasn’t enthused about the idea of going into long-term debt, he worries that if Lamar gives up its water system, it could start a trend toward a loss of independence.
“(Before DHEC shut down our wells), we had a complete little town. We had our own water, our own sewer, our own police department, our own sanitation,” Lloyd said, citing the piece-by-piece dismantling of Timmonsville’s municipal services as a cautionary tale.
Council took Hanna’s projections as information and agreed to meet again on Monday, December 19 to vote on whether to proceed with a loan application.