City to hold special meeting on contracts with Lincoln County

SARAH LOWERY
Staff Writer

City leaders will meet for a special-called session Thursday evening, with various proposed contracts with Lincoln County on the agenda for discussion.
Perhaps most pressing among these, in the eyes of Lincolnton Mayor John Gilleland, are water negotiations between the two entities.
Gilleland has long and adamantly stressed the need for the city to find additional water customers, and he believes taking advantage of the county’s continued growth could provide the perfect opportunity.
Talks got underway between city and county officials in December, and the eight-month-long negotiations have wrapped up with a proposed agreement reached, expected to be on both the City Council’s and Board of Commissioners’ agendas in September.
Previous attempts at coming to a compromise in the 1990s fell apart. Likewise, Lincolnton had once almost gained Cherryville as a customer to buy its water — and still has a line extending to the area — but the latter decided it was more cost-effective to expand on their water plant’s capacity and process their own.
The same question has arisen for Lincoln County, which had to weigh the decision of purchasing water from Lincolnton or ramping up its capacity by building a new plant.
Gilleland, who has been crunching the numbers for months, believes that the negotiated proposed selling price of $1 per 1,000 gallons will be a good, if not a great, deal for both sides.
The city built a 10-million-gallon-capacity water plant in the early ‘90s to supply various local textile companies, many of which are no longer in business. As such, only 30 percent, or 3 million gallons, of the plant’s water capacity is currently being used.
This also explains, he said, why rates are “so high” for city residents. He would ideally like to see that volume get up to 6 or 7 million gallons.
“The debt is what’s drowning us,” he said.
If the city begins selling water to the county, the true bottom-line cost to boost the plant’s output, based on variable expenses including chemicals to treat the water and electricity to pump it, will be 32 cents per 1,000 gallons.
This would allow the city to make 68 cents for every 1,000 gallons it sells.
Gilleland noted that those taking a cursory glance at the numbers may see that the “average total cost” to produce 1,000 gallons of water is $1.15 and, therefore, wonder why it would sell for anything less.
However, that figure includes certain fixed costs, such as plant employees’ salaries, air conditioning, etc., that won’t actually go up unless the plant’s capacity was met.
While he’s aware that, if approved, the sale of water at this price won’t be an overnight fix, he believes it will be a necessary step in the right direction.
The issue, however, won’t be weighed alone. It is just one part of a “bundle deal” of contracts between the city and county, including regarding animal-control, emergency-communications and fire services, to be discussed Thursday night, Gilleland said. One item taken up separately will be the Lincolnton-Lincoln County Regional Airport, which has proved contentious in the past.
The meeting will take place at 7 p.m. at City Hall.