Preliminary plans have been presented to not only accommodate the water and sewer needs of two sizable customers in Chemtex International and Smithfield Foods, but to be able to meet the needs of future industry locating to Clinton Industrial Rail Park.
Chris Thomson, project engineer for The Wooten Company, showed City Council members, city staff and Chemtex officials a map depicting the entire park, located off N.C. 24 East (Turkey Highway). He noted red areas, those vacant in the park, and said discussions had been had with city staff about what other facilities could potentially come to the area.
“These could conceivably one day be developed for some purpose,” said Thomson. “The yellow areas just along the north side are areas that have existing structures that are currently served on city utilities of some kind.”
One of those is Chemtex International Inc., which is currently involved in a permitting process that will see a $200 million biofuels refinery production plant open at the start of 2015, creating around 350 direct and indirect jobs.
Around the vicinity of the industrial park there are smaller 8-inch sewer lines, with a small pump station on Fontana Street, he said.
“In terms of conveying 500,000 gallons of wastewater a day from this location, we’d have to do some work. We couldn’t utilize the existing facilities,” said Thomson. “They just weren’t large enough in diameter. We realized in order to get into a larger capacity line to be able to handle this flow, we had to go down the Dollar Branch.”
With constructing a substantial crosstown force main to deal with the wastewater deemed necessary, Thomson said it was important to maximize the project’s viability for the future in seeing what else could potentially be served with a pump station.
“We started looking at, if we’re going to put in a pump station to serve Chemtex, should we also have it where it can handle future development in the industrial park,” said Thomson. “We looked at a few alternatives, but the most sensible place seemed to be just due east of the County Complex.”
Currently wooded property, that location would allow for collection by gravity sewer Chemtex and the rest of the industrial park. Other benefits could be ridding the city of both the County Complex station and the Fontana lift station, which has been the topic of many conversations for its problems with debris flushed from the Detention Center.
“If we built a pump station here, we could potentially abandon the Fontana Street station and the County Complex station,” said Thomson. “So we’d be constructing one pump station but getting rid of two.”
Flows from Chemtex and the Fontana Street pump station would be collected, along with some other properties on Luke Road. The vacant industrial parcels, as well as the County Complex, would be additionally accommodated through the proposed project.
“We’re going to have to build a long, large diameter force main anyway,” said Thomson, “let’s try to think about the future.”
“There are cheaper ways to facilitate Chemtex, but only Chemtex,” added public works and utilities director Jeff Vreugdenhil. “We could put a lift station in there that would just serve Chemtex. But just as soon as somebody else built someday, you’d have to (move it), and we’d have wasted that money. Just logistically, it’s smart growth to do it one time, the right way.”
Thomson said that would mean about 12,000 feet of line with 16-inch in diameter force main.
On the water side, service could be extended with 4,600 additional feet of 12-inch line from N.C. 24, looping that line toward Chemtex, which would also be able to benefit from the redundant line being brought as part of the water plant expansion project.
The wastewater improvements, including the gravity line, force main and pump station, would cost around $2.5 million, Thomson said. He echoed Vreugdenhil’s point that the city could choose a less expensive route to fulfill solely Chemtex’s needs. For the water upgrades, it would be about $450,000.
“The question that is going through my boss’ minds — the six people sitting up here — is how are we going to pay for that?” said city manager John Connet.
“You hit the nail on the head,” Mayor Lew Starling replied.
Connet said there are grant opportunities. Thomson detailed those funding avenues.
“It used to be the bread and butter to go to the Rural Center for capacity grants, and they still do have some money, but generally the honey pot is not there just for capacity,” said Thomson. He noted there are some federal jobs-related programs, including an Economic Development Administration application process that generally top out at $1 million. Jobs and private investment are two key areas that are looked at, so a large project like Chemtex would be “a big check mark for us,” he said.
The N.C. Rural Center and Community Development Block Grant were two state avenues that could be further explored, while the Drinking Water State Revolving Fund program might be able to offer some zero interest loans over a 20-year period that could assist infrastructure.
“We’ve been working together to discuss some of these potentials, and how to best leverage these jobs being created and the private investment,” Thomson said. “EDA is certainly the first place we would go shopping for funds.”
Crunching future numbers
Assistant city manager and finance director Shawn Purvis ran through numbers related to cash flow, including soon-to-be-freed up debt service payments on other projects and the potential revenue that selling city water could bring from industrial customers Smithfield Foods and Chemtex.
Purvis said debt service payments will hover around $750,000 for the next couple years before coming offline, freeing up funds for other capital projects.
“You can see that drop from three-quarters of a million dollars over the next couple years, but then we start dropping off significantly,” said Purvis.
He outlined a decline in existing debt service to $300,000 by 2016, $215,000 by 2018 and $20,000 by 2025. The proposed debt service for the water plant expansion, financing the Smithfield water tank and upgrading the industrial park area, would bring $635,000 through 2025 and another $200,000in subsequent years, based on a 40-year USDA loan.
The design process is wrapping up on a nearly $5 million project that will expand the city of Clinton’s water treatment plant to twice its current size, as well as establish a redundant water line, with construction on the project slated to be completed by mid-2014. A $1.8 million elevated water tank project is still in the works, with grant funds previously received but still being worked out.
Purvis said the entire cost was factored in as being financed by the city, along with the roughly $3 million from the Industrial park preliminary proposal. The numbers could also be further modified with grant funds, city officials said.
Anticipated costs for the water plant expansion, taking into account higher operational costs, maintenance and personnel costs that would come with it, would be around $382,000 in 2016 and inching higher over the years. Anticipated revenue looks to offset that, estimated at $828,000 in 2016 and similarly rising incrementally over future years taking into account inflation on both ends.
Anticipated revenue is based off the full consumption of about 1.5 million gallons in water daily (1 million from Chemtex, 500,000 from Smithfield) and an additional 500,000 gallons of sewer for Chemtex. Numbers show that the capital projects, with the addition of Smithfield and Chemtex as city utilities customers, are more than self-sustaining.
“As of year 4 (2017), we should start to see revenue come in,” said Purvis. “There is a positive to adding this. In the end, you’re not going to see (all the revenue). This is isolated to these projects. You will see some of that, hopefully, but if we have to do a significant upgrade to the wastewater plant, you can probably add another $500,000 to debt service.”
The anticipated revenues calculated are strictly water and sewer side, Purvis noted, and there are no General Fund revenues taken into account. Annexation would bring more revenue, however upgrades would bring more costs and debt service.
“Isolating these projects, they are great projects for the city and it’s worth it for us to assist them with these infrastructure improvements for the good of the community and our system,” said Purvis, “but there are other variables.”
Thomson said short-term, the water will be available to two new industrial customers through the plant expansion, but long-term a reclaimed water system should be explored. A system through which the city’s wastewater can be reused, reclaimed water is often referred to as “gray” water, not to be used as potable (drinking quality) water but for more industrial purposes.
“Our staff didn’t feel comfortable with the reclaim system to just serve one particular customer in Smithfield Foods,” he said, “but if we have two very large users, and maybe some potential others in the park that could use it, that reclaim system would get more traction and viability.”
Dan Boone, vice president and director of the Wooten Company’s Civil Department, said a recent study done showed a “surplus of water in the foreseeable future” in Sampson County’s aquifers, with the total amount of water available tallying around 20 million gallons a day, and total usage — agriculture users and all — of about 13 to 14 million gallons daily.
“So there’s 6 million gallons a day available within the county system,” said Boone, “but we do need to look at how we can conserve that water, because it’s not an unlimited supply. Reclaimed water use would be very beneficial.”
Jeff Taylor, vice president of technology for Chemtex, said about 50 percent of Chemtex’s operation can run on gray water, cutting the needed fresh water by some 400,000 to 500,000 gallons.
Connet said the city’s goal is to move down a parallel path as Chemtex continues to develop their project, exploring grant and other opportunities along the way, and keeping the development of a reclaimed water system in its minds.
“The reason staff backed off based on having only two customers is that it is a $5 million project in itself,” said Connet. “The idea was to get Chemtex located, get their operation started, and then look at opportunities not only for Chemtex and Smithfield, but other customers in our city that can use gray water — build the customers, then build the system. It’s in our minds and it’s on our drawing board, but we have to build the customer base.”
Chris Berendt can be reached at 910-592-8137 ext. 121 or via email at firstname.lastname@example.org.