McDOWELL — Pending regulatory approval, construction is expected to begin later this year on a $3 million project to extend sewer service to the Betsy Layne and Stanville areas.
The Southern Water and Sewer District unanimously awarded bids Friday for two projects, including the construction of a sewage treatment plant at Pike-Floyd Hollow and extension of sewer lines to Betsy Layne and Stanville, and board members hope to see service eventually extend from Mare Creek to the Pike County line.
“This is a big project, and it’s finally coming together,” said board chair Paula Johnson.
Kevin Howard, vice president of Summit Engineering, which has been working with Southern on the project, believes sewage service could unleash a wave of commercial development in the area, which has been held back because of a lack of sewer lines.
“A soon as there’s public sewer there, you’re going to start getting restaurants and businesses moving in there,” Howard said.
The project, which would see sewer service for the first time in the area between the Betsy Layne commercial district and the Huddle House in Stanville, has been in the works for 12 years, and still had to clear a few more hurdles before getting the board’s approval. One of the chief stumbling blocks was the fact that bids came in higher than expected for the sewer plant.
Howard said after the initial round of bidding came in higher than expected, they reopened bidding again, only have the bids come in at about the same cost.
As a result of the higher than anticipated bids, the project as originally envisioned came in at nearly $400,000 more than the funding Southern had available. Howard said he went back to the drawing board, cutting some outlying lines and some of the sewer plants features, and came back with an estimated cost that eliminated all but $44,000 over the overage. That left board members with the question of how to pay the additional cost.
Howard said the board could either use tap-on fees to address the additional cost of the project, which he recommended, or seek to increase the state loan already approved. Southern Chairman Hubert Halbert and several board members, however, said the utility already has plans for the tap-on fees and decided to go in the direction of increasing the loan.
But Halbert was concerned about the project’s feasibity after the cutbacks. In particular, he questioned whether Southern would be able to make the $42,000 in debt service payments. It had previously been estimated that the project would need 150 customers to pay for itself. Southern had previously received commitments from 180 customers prior to the cuts, but the newly drawn lines left only 135 committed customers.
Howard, however, expressed confidence in being able to make up the difference, once the project is underway and landowners begin developing property.
“We’re going to get a lot more than 15 more customers,” Howard said.
Howard also said the project must still be given a green light by the Public Service Commission, which he said would take a hard look at the project’s fiscal feasibility before allowing it to go through.
Reassured by the PSC review, the board ultimately approved a $1.3 million bid from Drains Unlimited for the line extensions and a $1.8 million from H2O for construction of the treatment plant, pending state approval of necessary financing and PSC review of the projects.
Howard said the financing should be in place by Thursday, but said the PSC review could take 60-to-90 days. Assuming all goes well, he estimated construction could begin by the end of June.