By Sara Strong
The Lewis and Clark Rural Water System is asking members to sign a new agreement that has made the Rock County Rural Water Board a little nervous.
It recommended that the Rock County Board of Commissioners not sign the new agreement because of some cost and operational issues that differed from the original agreement.
Rural Water also asked that the County Board find funding if it wants to continue with the project, which plans to bring additional water to the entire region.
County Attorney Don Klosterbuer recommended that the Rock County Board of Commissioners table voting on the issue, which it did.
Rock County Rural Water Manager Dan Cook said, "We can stay or get out Ñ but if we sign the agreement, it may cost us double."
The new agreement caused Rock County Rural Water to rethink its position on Lewis and Clark. Some of the specific concerns include:
The new agreement allows the Lewis and Clark board discretion on billing procedures. It doesn't clarify how the "per gallon consumption charge" is determined, how the board would determine "variable costs" or what amount the "meter charge" will be.
The new agreement is more binding in that it says each member is committed to pay their proportionate share of the construction cost unless the project is abandoned by the Lewis and Clark Board.
The new agreement allows the Lewis and Clark Board to require members to make advance payments of their projected share of the capital cost. At the earliest, new water could reach Rock County in 2011, so advance payments would probably pay for construction in South Dakota. If, then, the project would not get federal funding to reach completion, some members would have paid for the system with no benefit.
The original agreement said members were obligated to continue with the project contingent on receiving at least 90 percent funding with state and federal grants. That language has been removed and it's now estimated that federal money will take 80 percent of the cost, with state and user funds making up the difference.
State funding is uncertain right now, and federal funds have come in less than the Lewis and Clark board expected when determining its cost estimates.
Cook, said he's essentially concerned about the increasing cost to stay a member of Lewis and Clark. The advance payment portion of the agreement is the biggest concern to Klosterbuer.
The estimated cost to complete the project is increasing, largely due to inflation and less federal funding than was originally planned. Original total cost for the system was $235 million.
Also, if the state doesn't come through, Rural Water would be liable for the state's portion - as would all members of the system.
In 1993 Rock County Rural Water signed on to the project for a 300,000 gallon per day delivery at 71¢ per thousand gallons. Now, that cost is now $1.25 per thousand.
Rural Water dedicated $514,216.80 to the project originally. Now cost estimates could be as high as $755,741, using 2001 dollars and supplementing state funds that might not come through.
Cook said, "It started out to be a doggone good project. The board thought, 'What good is money in the bank if you donÕt have water in the pipe?' so we were for it."
The 300,000 gallons Rural Water is allocated is about half the average consumption, and would serve mostly as a safe, reliable water backup.
Cook is also concerned about lobbyist costs to get federal and state funding. Of course, lobbyists get paid whether the funds come through or not. Rural WaterÕs estimated lobbying cost from 2002 through 2012 are $200,000.
Cook said in a memo, "As you can see, LCRW is becoming very, very expensive if you consider RCRW's well #10 can produce more than 300,000 gallons per day for less than a $50,000 development cost. Well maintenance costs would need to be paid. However, the cost of production is considerably less than LCRW proposed $1.25/1000 gallons."
The city of Luverne is also a member of Lewis and Clark, and has an allotment of 750,000 gallons a day, or half of what it expects to use at high capacity.