Q&A - WATER

Where would new transmission lines go?
New transmission lines are not part of this project; we are only talking about the water plant.

What is the worst case if we don’t do this?
The worst case if we don’t do it is that we will be out of water.

Why did we continue to allow people to connect to the system if we don’t have water to give them?
We have planned five years out. Right now, we have an adequate water system to continue with the current growth scenarios that the Council has implemented for the next five years, and that’s when we projected that the water plant would be on line.

Is it fair to ration existing citizens’ water so new connections can be made?
We have no legal requirement to provide water to any new citizen. It is a public policy decision of the Council who is connected to the municipal water supply.

Won’t more water capacity just mean more growth for Cary?
Water is a public health issue; it is not a growth issue. Growth is a growth management issue. We need to separate the two. We are planning for the public water supply for the Town of Cary. The Council has addressed the growth management issue by slowing growth and controlling the amount of new connections until we can expect this necessary expansion to be in place.

If I vote against this bond issue, won’t that stop growth?
If you vote no on this, yes, it will stop growth. It will also have another effect. Half of the costs of this project are needed for regulatory compliance and for reliability needs for the plant, that is, we must spend $30 million just to continue to meet current needs. Concurrent with that upgrade, it is prudent to go ahead and increase the capacity of the plant since we are actually past its current capacity. Like any utility, whether electric or gas or water, it is important to have excess capacity to meet the peak demands of your customers. If you don’t have excess capacity, just like electricity, on the peak days, there will be customers who will be turned off.

What percentage of the expansion is needed for future growth and what percentage is needed to replace the expensive water from Durham and Raleigh? How much over and above the amount being supplied from Durham and Raleigh is this plant?
Currently, we are buying 8 million gallons of water a day from Raleigh and Durham and will be doing that over the next couple of years. Half of the expansion will replace that purchased water demand.

Why don’t we expand the plant just enough to replace the water we are buying from Raleigh and Durham?
If we only expanded the plant capacity by 8 millions gallons a day, we would have no reserve capacity. We have some commitments right now as well as vested demands from some of our customers that are coming on line that go beyond 8 million gallons per day.

If 8 million gallons capacity isn’t enough, why don’t we just go to 10 or 12 million gallons, instead of 16?
The way our plant is constructed, it is expandable in 8 million gallon per day increments, so it’s either 8 or 16. Sixteen is really the lowest we can go that we think is safe. It will just cover the amount from Raleigh and Durham and leave enough capacity for peak use, emergencies and economic development.

What is your backup plan if the bond referendum doesn’t pass?
If the bond referendum fails, we have three alternatives: one is not to expand the capacity of the plant, the second is to try to purchase additional supplies; the third is to try and identify an additional source of raw water or try in some way to increase our ability to draw additional water from Jordan Lake without an interbasin transfer.

If we don’t expand the capacity of the plant, it’s very clear that at some point in the future, the Town would not be able to provide a reliable water supply to the citizens of Cary. We could and we continually have in the past looked for additional reliable supplies of water to purchase at reasonable cost, simply because, if we do that, we can postpone the capital expense of expanding our own plant. The major suppliers in this area, Raleigh and Durham, have both said that they do not want to serve as a long-term water supply for the Town of Cary. They have explained that they have limited resources, they intend to continue growing, and they want to reserve their water supply to be able to continue the growth of their communities. We have very firm direction from both Raleigh and Durham that they do not want to be a long-term water supplier for the Town of Cary. The other issue is to try to identify other means of either increasing our water supply without an interbasin transfer or identify some other raw water source. Those would all have to be funded with other sources than bond financing if the Town decided not to do anything like revenue bond financing. A lot of people bring up the idea of us pumping our effluent from the South Cary Wastewater Treatment Plant back over to the Cape Fear River Basin to eliminate the interbasin transfer issue. Our engineers have done some preliminary cost estimates on that, and the preliminary cost estimates are about $20 million for that particular project. In order to take that step and eliminate the interbasin transfer in order to increase water capacity, we would still have to spend the sixty-some million dollars to increase the plant, but on top of that, we would have to spend an additional $20 million to eliminate the interbasin transfer issue. We believe very firmly that all the facts related to this issue point to the fact that we need to expand the plant. That raises the issue of the interbasin transfer. There are several facts which have to be looked at in the issue of the interbasin transfer and how much of an obstacle that actually is, in reality. You have to look at a number of facts.

What are the chances that the Town of Cary will not receive an interbasin transfer certificate from the State of North Carolina?
Jordan Lake was built and designed as a water supply with 100 million gallons a day safe yield. My understanding is that that is a fairly conservative estimate. In addition, that 100 million gallon a day water supply was designed by the Corps of Engineers originally with interbasin transfer in mind. As a result, the Corps of Engineers did studies related to interbasin transfer and its impact on the environment at that point and concluded that it was not a problem. In the mid to late 1980’s when the Town undertook its original water plant project in order to get an interbasin transfer, we had to do environmental studies ourselves to get that interbasin transfer. Those studies indicated that there would be no negative environmental impact. In addition, there is currently a positive interbasin transfer into the Cape Fear River from the Neuse River. Durham has a 13 million gallon per day transfer into the Cape Fear River from the Neuse. As I understand it, when you weigh the transfers in and out, there is a positive transfer into the Cape Fear currently.

Since the Town of Cary got its interbasin transfer for the original plant, the interbasin transfer laws are more clear and well-defined. The State of North Carolina General Assembly adopted a law that regulates interbasin transfer and defines the criteria that must be met by the applicant. Those criteria that are in the law are a set of administrative criteria which deal with public hearings, proposals for interbasin transfer, periods of input from the public that would be affected, some administrative requirements related to that, and a number of technical and engineering requirements that must be met that relate to environmental impact statements.

We are currently working with the State of North Carolina Division of Water Resources and the affected parties downstream - Fayetteville, Cumberland County, New Hanover County, Brunswick County, and Wilmington - to put together a hydrologic river model and an environmental assessment of the impacts of Cary and Apex’s increase in the Jordan Lake water allocation to address all of those questions. What we hope to gain from that, other than just fulfilling the legal requirements, is that the input from those downstream participants will hopefully eliminate any potential challenge after the decision is made. There is no indication that the results of that modeling effort will be any different from previous results both when the lake was originally designed and when the original water plant project by the Town of Cary and Town of Apex was undertaken.

The General Assembly established criteria for granting interbasin transfer certificates. If we meet those criteria, we have a legal right to that water. If the law says we have a right to it, and society runs on the rule of law, there is very little chance that that interbasin transfer certificate will not be granted. The issue of the politics of interbasin transfer is mentioned, and that is a factor to be considered. We believe we have taken a huge step in eliminating that as a potential problem by the involvement of all the downstream affected parties throughout this whole process. Kim Fisher, Director of Public Works and Utilities, and his staff have been working on this process since 1995 because that was when the need to expand the plant was identified. Since working with the state and all of the downstream affected parties is so time consuming, the process was begin at that time.

Would the condition of the Neuse River add additional requirements to interbasin transfer certificates that might require applicants to take some action to assure certain nutrient levels in the Neuse River?
As part of the process, we have to assess the impacts of the transfer on the receiving basin, which is the Neuse basin. We have already positioned ourselves to receive a favorable statement in that regard by the design of our wastewater treatment plants which removes 99% of all nitrogen that comes into them and by implementing certain erosion control, sedimentation control, and best management practices throughout the Town with regard to how we handle stormwater runoff. We are in a very good position to get a favorable response and do not expect any problems with that part of the environmental assessment.

Would the water plant be more cost-efficient if it was privatized?
Privatization is an issue that is currently in the forefront of municipal operations. We are looking at our opportunities for privatization and other means of managing costs at all of our utility plants. We are starting with the North Cary Wastewater Treatment Plant and then will move to the South Cary Wastewater Treatment Plant and the water treatment plant. Town staff is studying privatization. Any opportunity to improve or maintain service while lowering costs warrants further investigation.