Published: Saturday, Nov. 21, 2009 / Updated: Sunday, Nov. 22, 2009 09:00 AM
Tega Cay might absorb water company
TEGA CAY --
All of the water utilities in Tega Cay could be owned by the city – eventually.
The city is investigating the possibility of obtaining a revenue bond to purchase Tega Cay Water Service, the utility that provides water to the majority of Tega Cay. Tega Cay Water Service is owned by Utilities, Inc.
The newer sections of Tega Cay, including LakeShore, Serenity Point and Stonecrest are served by Tega Cay Utility Department, already owned by the city.
“In essence, it's a way for us to determine the financial purchase of Tega Cay Water Service,” said Councilman Larry Harper said at a Nov. 16 meeting. “It's just the next step in determining whether we can proceed and go forward.”
The city is hiring bond consulting firm Gardner Michael Capital to investigate whether the city can get a revenue bond as well as what the terms of the bond would be, Councilman John Dervay said.
He cautioned that this is not a commitment to purchase the utility, just an investigation into whether the utility would be financially viable.
“If [the utility] pays for itself, without increasing the price to the customer, we'll consider it,” Mayor Bob Runde said.
Dervay said that buying the utility is something the city has considered several times in the past 20 years. Most recently, he said, in 2000, when Utilities Inc. offered to sell the utility to the city for nearly $12 million. That price tag was too high, Dervay said, and negotiations stopped until Utilities Inc. approached the council again recently with an offer to purchase.
City manager Grant Duffield said that no asking price has been discussed. Gardner Michael Capital will help determine the feasibility of a revenue bond based on the income of the current water system. A revenue bond is a bond that would be repaid with the revenue generated by the utility company.
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