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WCUD looks to buy customers from city
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McMinnville officials will be meeting Tuesday night to consider an offer by Warren County Utility District to purchase 101 water customers from the city’s Water Department for $101,000. The customers are in the Rolling Hills area.
Leading to the offer to purchase was a water line break in Charles Creek the day before Christmas. The situation left 101 city customers without water until the next day. Because the break could not be fixed in a timely manner, the city asked for assistance from Warren County Utility District and it has been supplying those customers since Christmas.
McMinnville Water Department director Anthony Pelham brought the offer by Warren County Utility District manager Mike Green to the city’s attention in January.
“We have 101 current active customers in Rolling Hills,” said Pelham. “Because of the mutual aid with Warren County Utility District and their ability to serve them, versus the money we’re getting ready to have to spend, I’ve done a brief return on investment calculation to show you what they’ve offered.” According to Pelham, Warren County Utility District will purchase those customers for $101,000, minus $5,000 for legal services and $5,000 for miscellaneous transfer expenses. If the city relinquishes those customers, it will avoid having to pay $78,000 to repair the water line, $15,000 for a project on Rolling Hills 3rd Avenue, and $4,000 to WCUD for its assistance in emergency repairs to supply Rolling Hills with water after the break.
Also at stake, said Pelham, is approximately $50,000 in annual revenue from those customers. “It’s probably about a $49,000 to $50,000 a year in revenue we generate from Rolling Hills,” he said. “But we are looking at about $200,000 cash savings immediately from the sale and cost avoidance. There is no right or wrong. I would like for you to look at that and have a discussion at a later time.” The change could be a slight financial savings for residents in that area of about $3 a month if they become Warren County Utility District customers.
The offer will be considered by the city Water and Sewer Committee at 6 p.m. on the third floor of City Hall.