Tapping the trough
A wall calendar edged with hot-pink swirls seems out of place in the Junaluska Sanitary District, where the back door of the office opens onto a double-bay equipment garage and work boots leave muddy tracks across the concrete floor.
“It’s the cheapest calendar I could find at Staples,” offered Jim Francis, an elected board member for the sanitary district. Saving money, after all, is a point of pride for the scrappy water and sewer system, and it goes hand in hand with keeping rates as low as possible for the 1,850 customers along its lines.
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Waynesville wins concessions in Junaluska water negotiations
Waynesville officials have finally signed an agreement with the Junaluska Sanitary District that marries the two entities for 10 more years of water service.
The contract had been in talks for several months and formalizes the relationship between the town and its largest customer, who buys water from the town wholesale and resells to its own customers, which include heavy hitters such as the hospital, Tuscola High School and Haywood Community College.
For the next 10 years, JSD has agreed to buy at least 200,000 gallons of water from the town each day, and no more than 750,000. The town, in turn, has agreed that the district doesn’t have to ask permission before selling to new customers.
Negotiations have centered around usage numbers — JSD was originally gunning for very low minimum and sky-high maximum limits — and Waynesville’s request that they grant permission before new customers hook on.
Part of the urgency for JSD was a $500,000 grant from the N.C. Rural Center that wouldn’t be doled out until a contract was in place, ensuring the flow of water between the town and the district.
On Waynesville’s side of the negotiating table, the desire for a contract was more philosophical than concrete. Without a contract, they could have been put in the tight spot of either losing their largest customer — a real revenue killer — after dropping significant investments on infrastructure for JSD or unwittingly becoming a regional water supplier, should the district decide to start selling water on to larger and larger areas without notifying the town.
Fred Baker, the town’s public works director, told aldermen last month that, although their relationship with JSD has always been cordial and mutually beneficial, keeping an eye on the town’s water is a wise strategy.
“Having plans and talking about future water supply is a good thing to do, and this is just the start,” said Baker.
Waynesville guards water supply despite pressure to unleash the spigot
The Town of Waynesville is negotiating with its biggest water customer, trying to take a stronger role in the future of how — and to whom — it sells water.
The Junaluska Sanitary District, which provides water to some of Haywood County’s biggest customers, like Haywood Community College and Haywood Regional Medical Center, is in talks to sign a contract with the town for how much, and how little, water they’ll buy from the town over the next 10 years.
For Waynesville, these are pretty essential talks. Junaluska Sanitary District already serves a sizeable chunk of the county. Should they decide to expand that business — which isn’t out of the question — it could catapult Waynesville into the spot of de facto regional water supplier, not a role the town board is necessarily amenable to.
Equally, without a contract, the town could be spurned by its biggest customer, which would dent revenues and stick them with the bill for system upgrades they’ve done for JSD.
The original impetus for the contract was a $500,000 grant up for grabs from the N.C. Rural Center. JSD was poised to scoop up the money to expand or improve their water system, but they ran into a hitch: the Rural Center wanted a signed contract, guaranteeing that the flow of water from Waynesville would continue.
There had been a contract once before, signed in 1994 and expiring in 1999, but since then, the two groups had been operating essentially on a good-faith basis.
But with the need for a contract imminent, Waynesville then seemed to realize that it was in their best interest to formalize the relationship, too.
Currently, Junaluska Sanitary is an at-will customer. The town could shut off their taps anytime. Likewise Junaluska Sanitary could decide to buy water from Canton or Maggie Valley.
As the town’s largest water customer, losing their business would make the town’s investment in infrastructure to serve Junaluska for naught.
“If they decide to walk away from us, we’ve put all this infrastructure in,” said Waynesville Mayor Gavin Brown.
Perhaps a larger concern, however, is that Junaluska Sanitary may decide to get into the business of regional water transport, courting larger municipal customers like Clyde and boosting their demand from Waynesville dramatically.
Brown said the debate is a philosophical one.
“We don’t really want to tell them who and where they can sell to, but to dome degree we do. Yes, we sell water outside the city limits. And we want to sell it, but we want to know where it goes,” Brown said.
And that’s been the sticking point in negotiations with the JSD, who originally came to the table with a minimum daily purchase of 50,000 gallons, which is a pittance compared to the 400,000-plus they currently average each day. On the other end, they pitched a maximum daily amount of 1,250,000 gallons, an astronomical number that the town could technically accommodate, but would have to do some major upgrading to guarantee pressure and steady good service to everyone on the lines. It’s nearly a third of all the water Waynesville currently supplies to all of its customers.
“The concern we have is do they have aspirations to expand the system elsewhere?” said Town Manager Lee Galloway, who was slightly worried by the high- and low-ball figures thrown out by the JSD board in the initial contract draft.
In essence the town is concerned about being made a regional water supplier without their knowledge or consent, and with very little recourse if that happens.
In theory, Waynesville could terminate JSD as a customer if the latter began demanding more water than the town wanted, or was able, to give. But with vital public entities like the hospital, HCC and Tuscola High School all hooked into, and dependent on, water flowing through JSD’s lines, Waynesville would be hard-pressed to make such a drastic move.
Meanwhile, if the JSD were to ever see a better deal for water elsewhere, the town would be left holding the bag on all the infrastructure upgrades it’s made to accommodate them.
For their part, the JSD has said it doesn’t have any hidden agendas up its sleeve, and that the numbers in the original contract were just that — simply numbers. Their role, they say, is to provide water to people in the county who ask them for it, and they need this contract if they want to make the improvements necessary for that to happen.
“There are a few producers of water in the county, and there are plenty of people in the county that need water, so we have a statutory obligation to provide it,” said Burton Smith, the attorney for the district who is handling the contract. “In terms of how rapidly we grow, if we grow, those are decisions in part made by the [JSD] board and in part made by people who come to them and ask for water. We do not actively discourage or encourage anybody to do anything.”
But towns that provide water aren’t obligated to sell it to people outside their town limits. The choice to extend lines and expand water service beyond their borders is their own.
Since development often follows water lines, Waynesville doesn’t want to unwittingly contribute to sprawl by funneling more and more water to JSD for expansion, Brown said.
Waynesville has said that they’re happy for the JSD to grow, but within reason and with a little notice. They did concede to drop some contract wording that would’ve forced the JSD to come to them when they were considering new customers, but they also got the district to come down on their maximum limit to 750,000 gallons a day, which Galloway said will still require some system upgrades, but nowhere near what they’d need for 1,250,000.
In the end, said Mayor Brown, the discussions aren’t adversarial, but he sees the town as a public service concerned mainly with keeping the public good in view, while JSD, he said, is taking a business approach that sometimes clashes with the town’s view.
The contract is still with the town for review, and both sides said they expect to reach a workable solution soon.