Tega Cay sets $676,045 budget for new water utility

jmarks@fortmilltimes.comMay 20, 2014 

— Tega Cay took another step last week toward its acquisition of Tega Cay Water Service, passing the first vote on a $676,045 budget for the utility in its first fiscal year under city control.

Tega Cay Water Service won’t initially be enveloped by the city’s existing utility, Tega Cay Utilities Department. Instead, the now private utility would come in as a new entity, called Traditional Tega Cay Utility Service. It includes more than 1,700 water and sewer customers in some of the oldest parts of Tega Cay. TCUD serves around 1,500 customers in the city’s newest neighborhoods.

“We have come an extremely long way in this process,” City Manager Charlie Funderburk said.

“We still have several more items that we have to finalize and bring to City Council in the coming weeks if we are going to close on this transaction by the end of the month, but this was definitely another step in the right direction,” he said.

The May 12 vote laid out a budget for a truncated fiscal year, spanning May 31 to Sept. 30 when the fiscal year for existing city budgets ends. The budget assumes $285,909 for water service and $378,804 for sewer service. Another $11,332 in outside revenue is included, but tap fee charges aren’t.

Overhead, maintenance and administration will take $324,545 of that money and another $226,500 will go to a fund balance. The remaining $125,000 will pay back work done to evaluate and complete the acquisition.

Budget details in the new ordinance show the city purchasing water at $1.92 and bringing in $5.97 per 1,000 gallons from customers. Customers will pay $52.95 per month for sewer service.

The $1.92 is “not a firm number” and could be lower, Funderburk said, as negotiations continue with water providers York County, Fort Mill and Rock Hill. Currently the system gets water from York County.

The sewer rate likely would go up three dollars a month in the first full year of city ownership. The $5.97 comes from existing rates and the hope is that number wouldn’t increase beginning Oct. 1.

“That is what is currently being charged to Tega Cay Water Service customers,” Funderburk said.

The roughly three times higher sell than purchase rate is a common utility practice, he said, and pays for staffing, materials and a variety of needs common to running the utility.

“There is markup on what we charge for water versus what we sell,” Funderburk said. “That’s standard in any utility company.”

On Thursday, Council continued the process by authorizing Funderburk to complete a revenue bond agreement with SunTrust to fund the acquisition. The city and utility previously announced they’d settled on a price of $5.85 million.

Council also met past press time Monday, when a second and final vote on the budget was to be considered. An ordinance detailing the bond was planned for first vote, but it wasn’t complete as of Monday morning.

Funderburk said Monday afternoon the vote could be tabled to a special called meeting next week.

Mayor George Sheppard, following first vote on the budget last week, noted there still is plenty of work remaining.

“What we did last night,” he said last week, “is just the next step in many steps to get to the goal line, which is closing on the new utility department owned by Tega Cay.”

John Marks •  803-831-8166

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