City appears blindsided by county ‘deal’

By Tom Joyce

March 9, 2014

Mount Airy officials didn’t exactly kill the messenger who provided a sewer project update, but did needle him regarding a controversial new twist to a related city-county agreement.

Hours before Surry County Manager Chris Knopf gave his update on the Interstates sewer project to the Mount Airy Board of Commissioners during its meeting Thursday night, city officials had read something in the Mount Airy News they found disturbing.

It was a report involving county leaders’ decision to include the consideration of a separate utility project in the Bannertown/Flat Rock area in the official language of a new interlocal agreement, or contract, between both parties for the Interstates sewer project. Its approval is considered one of the last hurdles in a decade-old effort to extend the city-provided service along N.C. 89-West to a cluster of businesses near interstates 77 and 74 and also benefit areas in between.

However, city officials seemed miffed Thursday night that the agreement now hinges on their acceptance of the money-losing Bannertown/Flat Rock utility system — for which they see no financial benefit.

“When I read this in the paper, I felt like Washington had come to Mount Airy,” Commissioner Shirley Brinkley said. She was referring to a practice in which bills supported in Congress sometimes have unrelated amendments tacked on which wouldn’t be passed on their own.

This process is a matter of “let me add something different,” Brinkley said.

She then asked the county manager a pointed question about what he’d do if in city officials’ shoes: “Would you accept the kind of deal that has been offered to us?”

“No comment,” was Knopf’s reply Thursday night.

Meanwhile, Commissioner Jon Cawley said he thought the municipality had done its part in 2012 by allocating $1 million toward the cost of the $4.6 million sewer project, which will provide it new utility customers and spur economic development.

“Now it looks as if all of this is going to be contingent on us taking over a water system that is losing money,” Cawley said.

The county manager mainly outlined the history of the N.C. 89-West project Thursday, and other than responding to the the comments by city commissioners did not present the proposed interlocal agreement now on the table.

But Knopf did say Thursday that the Bannertown/Flat Rock amendment is something highly desired by the Surry County commissioners. “It is something they feel like is on the table,” he said.

Deal Sweetened

The county is now losing about $66,000 per year on the Bannertown/Flat Rock system, where hookups were not required of residents when the water and sewer service was extended nearly 10 years ago. Since the county must pay off long-term debt for the lines, there are not enough paying customers to make the system profitable.

An analysis last year by then-City Finance Director John Overton showed that Mount Airy is reaping about $88,000 in user fees per year. But if it took over the system from the county, which would include annual lease payments to Surry of $136,825 for the utility infrastructure, its yearly revenue would drop to around $40,000. Overton strongly recommended that the city not take over the system.

Although the proposed interlocal agreement was not fully aired Thursday night, there was an indication that Surry officials are sweetening the deal.

“It’s the county’s position that if that were to be done,” Knopf said of the takeover, “it would be profitable.”

While Knopf did not elaborate, Eddie Harris, the chairman of the county commissioners, said Friday that the county is willing to implement mandatory hookups in Bannertown/Flat Rock as part of the agreement. This would increase the financial incentive to Mount Airy.

County Commissioner Larry Phillips, who represents the Mount Airy District and attended Thursday’s presentation, said away from the meeting that he didn’t blame the city government for rejecting the takeover up to now.

“If I was sitting where a city board member was sitting, I wouldn’t buy it either,” he said of the collective skepticism of Mount Airy officials. “I think (we’ve) found a way to address this in the contract.”

Phillips acknowledged that mistakes were made by county officials who were in office when the Bannertown/Flat Rock system was set up a decade ago. That included the failure to require hookups and plot the financial future of the operation as a whole.

“We got it wrong,” Phillips said. “A little honest confession wouldn’t hurt us.”

Both Mount Airy and Surry County officials are looking forward to a joint meeting scheduled on March 26 in Dobson, where both sides will explore the details of the interlocal agreement and possibly negotiate a satisfactory deal for all.

Phillips said he is not concerned as much about the history related to Bannertown/Flat Rock as the future of the Interstates sewer project that is important to many. “Trying to move this thing forward.”

Tom Joyce may be reached at 336-719-1924 or on Twitter @Me_Reporter.