Kennedy reflects on potential Sanford water and wastewater utility merger

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From a potential water and wastewater systems merger to continued development in Chatham Park, Pittsboro is facing significant changes over the next few years. Prior to his resignation announcment last week, The Chatham News + Record sat down with Pittsboro Town Manager Chris Kennedy to get a sense of where the merger stands and what Pittsboro residents can expect. Here’s what you need to know.

What is the status of the water and wastewater system merger with the city of Sanford? What is the timeline that we can expect?

At the moment, staff from both municipalities are collaborating to examine debt service, each city’s capacities and a utility rate structure. Freese and Nichols Inc. — the consulting firm on the project — already developed a scope of work for the project and will help conduct a study that examines financial options and impacts of a merger.

The merger would fill a significant need; Kennedy said Pittsboro’s sewer and water plants are the same size as they were two decades ago.

“So we really haven’t made the investments to increase our own likelihood of success,” Kennedy said.

Town staff is working on two deliverables for the board — one within 90 days and one within 180 days. The goal of the first deliverable is to lay out what rates would be, if a merger does and doesn’t take place.

“Sanford’s only going to have so much tolerance to raise their rates, if at all, to cover our experience,” Kennedy said.

It’s important for the town to show some momentum in terms of their commitment to the project, he said.

Kennedy said, if the merger takes place, the systems should be mechanically connected by 2024, with the first primary connection of the project being the Sanford sewer force main. Last fall, staff bid the project, which came in 30% over budget; Kennedy said staff are hoping to bid the project again, and have asked the state for more loan proceeds in preparation.

What concerns do you or the board have regarding the merger?

Kennedy said the first hurdle is in determining whether the estimated rates make sense for both municipalities. For Pittsboro, the balance comes in trying to keep rates at a moderate pace and still doing projects, he said, while for Sanford, it’s a matter of showing the city that an investment in Pittsboro’s utility is worth the initial investment in the long run.

“If something’s gonna break and sever the relationship, so to speak, I think the rates will also do that,” Kennedy said. “That will do it.”

Still, he doesn’t anticipate that being the case.

“We’re confident that it will (happen),” he said. “But we also know that there’s a lot of things in play here and we want to be very diligent on how we do it. And so if we feel like there’s a critical thing to answer, let’s try to answer early, and then go on to the other particulars of the merger.”

One concern Kennedy has is how staff will be placed, if a merger takes place — something that Commissioner Jay Farrell also brought up at last week’s town commissioners meeting.

“Ever since we first started talking about this, one of the first things out of my mouth, every time we brought it up was, ‘I want you to take care of my people, if they end up coming over to you,’” Kennedy said. “‘If they’re not Pittsboro employees, I want you to take care of my people.’”

The board is also examining specifics of the merger like whether Pittbsoro will maintain a billing office so that residents can have someone to talk to in town without having to drive to Sanford.

Kennedy said commissioners are generally keeping their concerns close to the vest, but that the board has had some “thoughtful conversation” regarding the merger. Though he believes commissioners likely have lingering questions, from his understanding, he has no reason to believe that the board isn’t all in.

“There’s undoubtedly some anxiety, I think we all have that,” he said. “...I think it’s just different. It’s a departure from what we’ve done.”

What could rates potentially be?

In the last fiscal year, the town had a 43% increase to water and an 18% increase to sewer utility rates, Kennedy said that prior to that, the town went a number of years without an increase to either.

His recommendation to the board has been to adopt whatever the percentage increase is for utility rates based on the U.S. Bureau of Labor Statistics’ consumer price index for all urban customers.

This fiscal year, the board made 15% increases to both sewer and water. Though he didn’t provide a specific estimate, Kennedy said he expects rates to increase.

“It’d be my professional opinion that without Sanford, we’re going to struggle to keep the rates at a moderate level, and to keep the utility, the actual infrastructure, in a healthy condition in order to provide a high quality and expected level of service,” Kennedy said.

Publisher and Editor Bill Horner III contributed reporting to this story.

Reporter Maydha Devarajan can be reached at mdevarajan@chathamnr.com and on Twitter @maydhadevarajan.

Chris Kennedy, Q&A, water, wastewater, merger, Pittsboro

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