While the City of Smithville has hired a public relations firm to launch a campaign against a proposed DeKalb Utility District water treatment plant off Holmes Creek Road, DUD officials say that they plan to break ground on the facility by mid-summer, and expect to have the plant up and running within 18 months.
City officials say they are opposed to the project not only because the city will lose more than $500,000 in sales every year, but that rates would increase for both Smithville and DUD customers.
Smithville utility engineer J.R. Wauford told the city council recently that customers of both DUD and the city will see increases of as much as 50 percent if the DUD plant is built.
DUD officials say that the average price increase for their customers will only amount to $10.50 per month, and that will be spread out over a three-year period.
Smithville Mayor Taft Hendrixson has called the plan “disastrous,” and city officials have questioned whether DUD can treat its own water more cheaply than it can buy it from the city.
The city has hired the Calvert Street Group, a Nashville PR firm, to inform both city and county residents of their position.
The DUD now pays the City of Smithville $2 per 1,000 gallons for water.
According to the terms of the contract between DUD and the city, the cost increases by five cents per 1,000 gallons a year under the agreement, which expires in 2014.
The envisioned completion date indicates that the DUD facility should be operational by the time the current contract with the City of Smithville expires.
While DUD officials admit that rates will be increased to help finance the new facility, they say the increase will not be as sharp as city officials estimate.
A prepared statement released last week by DUD officials said “ We believe having our own water treatment plant will benefit all of DeKalb County because it will provide an additional source of water for our community to plan and handle future growth.”
The statement went on to say, “There is a lot of misinformation being circulated in the community about the impact the new water treatment plant construction will have on our customers' rates. Here are the facts:
“The increases will be spaced out over the next three years.
“Our minimum rate for customers, who use 2,000 gallons or less, will rise from as low as $17.50 presently to $19 in July 2012, then to $20.13 in July 2013 and to $21.75 in July 2014. That's a total of $4.25 more a month spaced out over a three year period.
“For our average customer (who uses 6,000 gallons per month), their current bill (plus tax) is $44.00. That will rise in July 2012 to $47.75, then to $51.08 in July 2013 and $54.55 in July 2014. That's a total increase of over $10.50 a month spaced out over the next three years.
“Customers don't pay their water bills in percentages. They pay them in dollars and cents. We believe once our customers know and understand what is being proposed, they will see why this plan is a good idea and will be a good investment in their future and the community's future,” the statement read.
DUD manager Jon Foutch told the Review last week that he felt the new plant was the right move, and that if the opportunity was missed it might not be available again for several years, if ever.
“If we don't do this we won't be doing the right thing for our customers,” Foutch said.
“It is our opinion that having our own water treatment plant will benefit all of DeKalb County,” he said. “It will provide an additional water source for our community to plan and handle future growth. It will also allow us to establish and maintain a backup water system in case of emergencies.
"We believe building such a facility will give our customers more control over the ongoing costs of their water service and ensure the reliability of that water service in the future,” Foutch concluded.
The DUD already has an agreement with the Corps of Engineers which allows them to pull up to two million gallons of water per day from the Center Hill Lake, and has approval to build the proposed $10.5 million pumping station and water treatment plant off Holmes Creek Road in the Yolanda Hills Drive area.
According to DUD officials, the Corps of Engineers has a limited amount of water withdrawal available from their storage pool, and if DUD does not act now, the opportunity may be lost to another industry or utility.
The proposed project would be funded through Rural Development and Tennessee Utility Assistance, which is a program offered by the Tennessee Association of Utility Districts.
According to the DUD release, “To finance the project, we are receiving funding from the Rural Development Agency including a $5 million loan and a $1.25 million grant. In addition, we are receiving funding from the TUA of another $4.25 million. We believe these funds, especially the grant monies, combined with the historically very low interest rates we are receiving, will help us to finally move forward with building the water treatment plant.”
At the last meeting of the Smithville Mayor and Aldermen, Wauford told the assembly that the city's water treatment plant, which has just been renovated, has the capacity to supply water to both Smithville and the DUD for the foreseeable future.
“You have a four-million-gallon-a-day water treatment plant,” Wauford said. “You're producing about 1.8 million gallons per day. About 700,000 to 800,000 gallons is going to the DeKalb Utility District. Your contract with DUD now gives them the right to buy two million gallons a day, which is well within your capability of doing so.”
Customers in the Baxter/Silver Point areas will not be affected by the increases, as they receive their supply from Baxter.
 “Their rates will not be changed in any way by the construction or operation of the new water treatment plant. They will not receive any water service from the new facility, so it would not be fair to make them have to pay for it,” reads the DUD release.
“Our customers in the Baxter/Silver Point areas receive water through a contract the DeKalb Utility District has with the city of Baxter and we agree with those there who feel their water costs are high.
“We have spent tens of thousands of dollars and months of time trying to come up with a financially viable way to provide water to that area by bringing it across the lake from the Smithville side. Unfortunately, we have not been able to identify a plan that won't result in a further increase in water rates, which is not acceptable.”