It appears residents in the Rolling Hills area could have a new water provider.
McMinnville officials are seriously considering a verbal offer from Warren County Utility District’s manger to purchase 101 customers.
Water and Sewer Committee members Jimmy Bonner, chair, Everett Brock and Mike Neal met Tuesday and instructed Water Department director Anthony Pelham to bring them a written proposal for their consideration.
The decision was made after a presentation from Pelham outlining the financial situation in a three-page summary.
“The line blew out on Christmas night and Warren County Utility worked with us. The line was repaired and we have an interconnection with Warren County now but during the process it became very evident we would have to spend a healthy chunk of money if we wanted to replace and upgrade the line across the creek,” said Pelham.
While the city would have to spend approximately $100,000 replacing the broken line under Charles Creek and upgrading the system, the county has an existing line it already has connected to the customers and the verbal offer from Warren County Utility District manager Mike Green would give the city $101,000.
“From a financial standpoint only, basically, it’s a $100,000 benefit if we wanted to sell that asset and convey those customers to Warren County,” said Pelham. “If we want to keep it, I’ll be seeking permission from the board to spend roughly $100,000 to fix Rolling Hillis 3rd and the creek crossing for a permanent repair. In doing that, there is some offset of annual cost avoidance due to Rolling Hillis pump station and so forth.”
Customers in that area generate approximately $49,000 a year in total revenue, which does not count expenses for supplying water to those customers. Pelham says those customers actually generate $10,000 a year for the city.
“That’s obviously not all profit but that’s what the total revenue is,” said Pelham. “I’m estimating roughly a 15- to 16-year payback on the cost to repair it and that’s assuming we have no other expenses on this section within that 15-year period.”
Brock says he’s against selling any asset when there’s a chance the city could annex some or all of that area, but he won’t be heartbroken if the customers are relinquished to the county utility.
City administrator Bill Brock reminded the committee that Rolling Hillis was included in an annexation effort a few years ago and residents were adamantly against it.
“They didn’t want the city of McMinnville anywhere near them during our annexation effort a few years ago and I don’t think the feeling has changed,” said Brock.
A motion by Neal to have Pelham bring the committee a written offer passed 2-1 with Alderman Brock voting against it.