Agenda 07/11/2006 - Laserfiche WebLink

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MEMORANDUM DATE: June 30, 2006 TO: Robert R. Collins, City Manager SUBJECT: Request from PSA concerning Regional Water/Sewer Authority The City recently received a request from the PSA to pursue formation of a Regional Water/ Sewer Authority. My recommendation is, rather than prepare a lengthy response with references to past studies, existing agreements, etc., that we respond similar to the below draft that can be easily understood by PSA Board members, County Supervisors, City Council and, most important, the public. l)r~ft Response The PSA is carrying over $40 million in debt. The City's Water and Sewer Funds have none, and are even transferring significant amounts each year to offset other General Fund expenses. After the Henry County Board of Supervisors indicated they were not interested in becoming involved with the PSA debt, the PSA has suggested that the City should join with them in forming a Regional City/County Water and Sewer Authority, implying there might be advantages to both parties. Before paying a consultant to generate a voluminous report, we believe there are two basic questions that need answers. (1) How does the PSA intend to segregate and handle their existing debt so as not to adversely affect City customers in both the short and long term? (2) There is only one wastewater treatment plant now operating in the Martinsville/Henry County area, and there remain only two water treatment plants with systems that cannot be easily combined without major infrastructure changes. All existing facilities (plants, pipelines, pump stations) will most likely have to continue operation and be maintained. In what realm does the PSA envision significant operational, infrastructure or personnel changes that might make an expensive major restructuring worthwhile? Unless the PSA can provide convincing and compelling answers to these two questions, there is no reason for the City to become involved.