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HomeMy WebLinkAboutAgenda - 09-12-2000-2ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: September 12, 2000 Action Agenda Item No. SUBJECT: Oran a Alamance Utili S stem Re ort DEPARTMENT: County Manager PUBLIC HEARING: (Y/N) No ATTACHMENT_(S): INFORMATION CONTACT: County Engineer's report County Engineer, ext 2303 (Under Separate Cover) TELEPHONE NUMBERS: O/A Corporate Bylaws Hillsborough 732-$181 O/A Articles of Incorporation Chapel Hill 968-4501 O/A Amended Articles .of Incorporation Durham 688-7331 O/A Orange County Service Area Map Mebane 336-227-2031 PURPOSE: To provide the BOCC with general information as to the Orange-Alamance Water System to provide, to the extent possible, answers to specific questions posed by Commissioner Jacobs. BACKGROUND: The Orange-Alamance Water System is anon-profit rural membership corporation that is classified under North Carolina health/environmental health statutes as a public water supply utility. It was officially incorporated in September 1965 and became operational in August 1968. In its 32 years of operation, the system has grown from its original 100,000 gallon per day (gpd) demand from 360 customers in Orange and Alamance Counties to a system which currently serves 3600 commercial, industrial, institutional and residential customers (approximately 1200 in Orange County, 2400 in Alamance County) with an average water consumption of 1.0 million gallons per day. The terms of the Eno River Capacity Use Agreement limit Orange-Alamance to a Stage I raw water withdrawal of 820,000 gallons per day during periods of low flow, which typically occur for approximately six months of the year. On several occasions, one lasting for as long as a month, Orange-Alamance has been limited to withdrawals as low as 700,000 gallons per day. Orange- Alamance makes up the difference between its Eno River allocations and its actual water demand by means of purchases of treated water from other water systems and/or by the use of well water from its single operational high-capacity drinking water well. Another high capacity drinking water well is due to become operational in the very near future. Orange-Alamance faces a number of challenges in its effort to meet the ever-increasing water demand of its growing customer base. Although it has transferred some of its larger customers to other water systems, it probably needs to upgrade the equipment in its water plant and its water demand often exceeds its treatment capacity. Furthermore, the water supply currently available to Orange-Alamance is often insufficient to meet to its existing demand. Orange-Alamance is working to improve its water supply situation, primarily by developing ground water wells and by entering into water supply contracts with other water utilities. However, under any circumstance or strategy currently under discussion, it is unlikely that the Orange-Alamance will be able to accommodate the projected 250,000 gpd water demand resulting from the build-aut of Efland-Cheeks community and the Buckhorn Road Economic Development District. Orange-Alamance and its customers have an important part in dealing with many of the issues related to the development and evolution of the Efland-Cheeks community. The BOCC has developed an overarching Efland goal which consists of a number of critical components, including: 1) addressing how water and sewer utility service necessary to develop the Buckhorn Road EDD can be provided; 2) defining a realistic and appropriate utility service area for the Efland-Cheeks community; 3) initiating a small area planning process for the Efland-Cheeks community; 4) creating and adapting a master plan for the Efland sewer system and expanding the sewer system; and 5) entering into a joint planning relationship with the City of Mebane. Consideration and evaluation of Orange-Alamance's role in: a) continuing to provide water service in the Efland-Cheeks community; b) providing water service to the as-yet unnerved and developing portions of the community; and c) providing water service to the Buckhorn Raad Economic Development District are essential elements of the process. The BOCC's review and discussion of the issues either outlined or implied by the contents of the attached report represents an important initial step in addressing and further delineating the Efland goal. FINANCIAL IMPACT: Not applicable. RECOMMENDATION(S): The Manager recommends that the Board accept the report and attached material as information. 3 MEMORANDUM TO: County Commissioners COPIES: John Link, County Manager Geof Gledhill, County Attorney Craig Benedict, Planning Director FROM: Paul Thames, PE, County Engineer DATE: September 8, 2000 SLTSJECT: Orange-Alamance Water System, capacity and background issues ATTACHMENTS: Articles of Incorporation, Amended Articles of Incorporations, Bylaws, map of waterlines in Orange County This report is intended to provide general background information on the Orange-Alamance Water System in terms of its history and organization as well as information on the system's existing ar current water supply capacity. Furthermore, this report will attempt to address the twelve specific questions posed by Commissioner Jacobs (see Attachment "A"). Information contained in this report is based on conversations between the County Engineer and Orange- Alamance staff and NC Public Water Supply Branch staff and on documents such as the Articles of Incorporation far and Bylaws of the Orange-Alamance Water System. General The Orange Alamance Water System is a perpetual non-profit rural membership corporation that is classified under North Carolina health/environmental health statutes as a public water supply utility. It was officially incorporated in September, 1965 and began operation in August 1968. The system's original 100,000 gallon per day (gpd) demand from 360 customers in Orange and Alamance Counties was met by way of purchase of treated water from the City of Mebane, supplied by way of an interconnection between the two distribution systems. Orange- Alamance's own 1.0 million gallon per day (mgd) capacity water treatment plant on the Eno River began operation in June 1969. The creation of the Orange-Alamance system was originally the concept of Wiley B. Perry, one of the founding members of the board of directors. According to newspaper accounts of the day, Mr. Perry was trying to acquire water utility service for his Perry Hills subdivision development. He found that it was neazly as easy to obtain Farmers Home loans and grants to build an entire water system as it was to acquire funding for an extension of utility service from the Town of Mebane water system. 4 The Orange-Alamance water system currently employs 12 individuals (5 water plant operators, 3 distribution system operators and 4 administrative personnel). In accordance with the provisions of its Articles of Incorporation, Revisions to the Articles of Tncorporation and Bylaws, the operation of the corporation is currently overseen by a nine member board of directors (although 12 are provided for in the Articles of Incorporation and Bylaws) which meets an a monthly basis with an occasional special meeting. Every custamer of the system is required to~ purchase one share of the corporation (less than $400) and every custamer is, at least in theory, a voting member of the Corporation. No individual can hold more than one corporate shaze or has more than one vote. The corporation holds an annual noticed meeting of all the members, although in recent years this meeting has not been well attended by the general membership. Although Board of Directors meetings aze not noticed, any member may attend a board meeting. Any member or even anon-member may petition the Board of Directors to consider an item of business {for example, the Board must approve any non-residential or multi-service request exceeding two taps). The Bylaws authorize the Boazd of Directors to set the operational rules, regulations and procedures by which the utility operates (including service extension and tap-on policies). Special meetings may be called by a petition often percent of the members ar by action of the Board of Directors. No Orange-Alamance meeting is a public meeting, insofar as public meeting statutes are concerned, and meetings are not noticed to the general public. Directors of Orange Alamance are nominated and elected by vote on by the members of the corporation. In recent years, as a consequence of inactivity by the general corporate membership, directors have been nominated and elected primarily by the sitting Board of Directors. Officers of the corporation (president, vice-president, secretary and treasurer) aze members of the corporation and the Board of Directors and are nominated and elected by the Board of Directors. Directors may be removed by the vote of a majority of members of the corporation present at the meeting in which the removal is an item of business. The members present at any particulaz meeting of the members constitute a quorum at the meeting of the members. The removal process is initiated by a petition of charges against the director, signed by ten percent of the members of the corporation or by a member of the board of directors. There are no provisions in the Articles of Incorporation or Bylaws for dissolution of the corporation ar the Board of Directors or joining the corporation with another utility or other such entity. There is a single reference in the Bylaws to a dissolution of the Corporation in terms of disbursement of the Corporation's remaining assets. The Boazd of Directors may sell 'the corporation, mast likely as a "going concern", either voluntarily ar otherwise. It is also possible that the assets of the corporation Gould be sold with no plan to continue operation of the utility. That is an event that is unlikely to occur except in situations of "forced" where creditors, bankruptcy court, or state court in receivership action could cause the corporation to be dissolved. There are no guidelines in the Articles or Incorporation or the Bylaws of Orange-Alamance specifying or outlining haw system expansions to serve existing ar new development will be evaluated for approval, except as noted above, that the Baazd of Directors may. make such evaluations and decisions. As a public water supply utility, Orange-Alamance is ruled by the same set of state drinking water standazds, regulations and statutes (applicable to water supply, z S water treatment, quality control testing practices, design and construction of infrastructure, etc.) that govern other public water utilities such as those operated by OWASA, other water utility districts and authorities, municipalities and other local governmental units. The primary regulatory authority over Orange-Alamance is the Public Water Supply Branch of the NC Division of Environmental Health. The water supply branch requires that Orange- Alamance conduct and report daily water tests, approves the use of wells in the system and approves and permits the design of distribution system extension, plant modifications, etc. In the event that quality control testing shows evidence of water contamination, the Water Supply Branch may work with the Orange County Health Department to issue any notices necessary for boiling or curtailing the use of water. Orange-Alamance is also subject to a lesser degree of'regulatory oversight by the NC Division of Water Resources. This agency deals with surface water supply issues related to interbasin transfers and water supply planning (the interrelation of water supply with water demand). Water Resources, through the water supply plan process and coordination with the Public Water Supply Branch, could conceivably compel Orange-Alamance to adopt a moratorium on new water customers in the event that water demand approaches or exceeds system supply capacity. Through its enforcement of interbasin transfer statutes, Water Resources could regulate Orange- Alamance's interbasin transfer of water from the Eno and Neuse River basins to the Haw and Cape Fear River basins, if the interbasin transfer were to increase to a level exceeding the 2.0 mgd regulatory trigger point. As Orange-Alamance's current interbasin transfer does not exceed 800,000 gpd, it is unlikely that such an increase would occur in the foreseeable future. Orange-Alamance is not subject to regulation by either the NC Utilities Commission or Orange County. It is not required to seek Orange County's approval or input when extending its water lines or serving any subdivision within the County's jurisdiction. Orange-Alamance has been invited to Orange County Planning Department staff development review meetings dealing with development projects where Orange-Alamance service extensions are contemplated Orange- Alamance representatives have attended one such meeting, the one in which the large (+/_ 250 unit) McGowan Creek subdivision was discussed. However, there is generally no coordination or discussion between Orange Alamance and the Planning Department with regard to service extensions. Planning staff typically learn about proposed service extensions when developers submit plans with those extensions indicated. The Planning department does require that developers of subdivisions that are proposed for water service from Orange-Alamance provide a letter from Orange-Alamance certifying its intent to provide service. With recent larger scale development projects proposing the extension of water service from Orange- Alamance, the Planning Department has required that developers demonstrate that Orange- Alamance can provide an adequate level of water service. Orange-Alamance does work closely with Orange County, to the benefit of the County, to coordinate providing sewer services to those entities and households within the joint service areas of the Efland sewer system and the Orange-Alamance Water System. Orange-Alamance provides the billing and collection services for the sewer system and enforces payment requirements by curtailing water service to any customer whose sewer bill is unpaid. Infrastructure The Orange-Alamance system can be basically described as consisting of: 1) its original 1.0 mgd water treatment plant, which is located at the northwest quadrant of the intersection of the Eno River and US Hwy 70 west of Hillsborough and east of Efland; 2) a 12" diameter water main trunk line extending west along Hwy 70 from the plant to a point just east of Mebane city limit, then north and west through and across the northern end of Mebane, then south along the west side of Mebane and crossing the interstate at Trollinger Road to NC 119, then continuing south along NC 119 through Hawfields and across NC 54 to Swepsanville; 3) one 300,000 gallon elevated water tank in Orange County (on Hwy 70 adjacent to the Hancor Plant) and one 300,000 gallon and two 100,000 elevated water tanks in Alamance County (US 70 west of Mebane; NC 119 and Swepsonville); and 4) a number of smaller diameter water mains and lines, from 2" to 8" in diameter serving azeas in both Orange and Alamance Counties that are outlying from the route of the primary 12" diameter trunk main. Furthermore, Orange Alamance awns and operates or will operate two ground water wells, each with a rated capacity significantly in excess of 100,000 gpd, one located on the grounds of the treatment plant in Orange County and one at the elevated water tank on NC 119 in Alamance County (the Alamance well has not yet been put in service but will be very soon). Water from the well at the treatment plant is currently run through the treatment plant before it enters the distribution system. Water from the well at the elevated water tank will be chlorinated and discharged directly into the distribution system. Orange Alamance also owns an approximately 30 acre site on NC 54 in Alamance County just east of Swepsonville where Haw Creek flows under NC 54. The original plan for this site was as a location for a raw water intake on Haw Creek and a water treatment plant. However, during the state's drinking water watershed classification process during the early and mid 1990's, Orange- Alamance (at the behest of Mebane and Graham) officially abandoned this property as a raw water intake site and petitioned the Environmental Management Commission to declassify the Haw Creek watershed as a water supply watershed. In Orange-Alamance's Orange County service azea (shown on the attached map), most of the customers lie in the US Hwy 70 corridor bounded by I-85 on the south and Lebanon Road on the north. However, there are about 20 customers in the area near the intersection of Mount Willing Road and West Ten Road south of I-8S and perhaps 40 customers on the north side of Lebanon Road in areas neaz the intersections of Lebanon Raad and Frazer Road and Lebanon Raad and Brookhallow Road. Customers in both Orange and Alamance Counties that are not adjacent to the 12" main are served from the network of smaller diameter, often dead-end, mains. While the Orange-Alamance. distribution network does contain f re hydrants (primarily along the trunk main), the system is not generally designed to provide fire protection. It certainly could oat be expected to meet fire protection standards far water pressure or flow in azeas not adjacent to the 12" trunk line. Although there aze oat widespread or frequent problems ar complaints with low water flow or low water pressure on the Orange-Alamance distribution system, customers located at the ends of long segments of small diameter water mains may occasionally suffer from conditions of low flow or pressure. This would be particulazly true during periods of high demand at the upstream portions (nearest the trunk mains) of small diameter water lines. 4 Current O eration and Demand Today, the Orange-Alamance water system has a water demand. that averages approximately 1.0 mgd and that often exceeds that demand during the traditionally high demand periods (the hot and/or dry weather July to November). Its customer base contains approximately 3600 industrial, commercial, institutional and residential customers, of which 1200 are in Orange County and 2400 aze in Alamance County. Orange-Alamance does not keep records that specifically provide an accounting for water use/demand an a by-county basis. However, in the early 1990's, a disruption (of several weeks duration) of the primary water supply main at a paint just inside Orange County (at the Alamance County line, cutting offthe Alamance County portion of the service area) reduced Orange-Alamance's water production and withdrawals from the Eno River by approximately 75%. It is probable that approximately three quarters of Orange-Alamance's current water production continues to be an interbasin transfer that serves a significant portion of the water demand of east-central Alamance County. Demand for water from the Orange-Alamance Water System continues to grow. Historical records indicate that Orange-Alamance's customer base is typically increased by approximately 100 new customers (primarily residential) each year. These customers generate an annual increase in water demand of approximately 20,000 gpd. At least somewhat alleviating increasing demands from some sectors, Orange-Alamance has transferred (in 1999) its lazgest water customer, the GKN manufacturing facility, to the Town of Mebane water utility. There has also been some discussion between Orange-Alamance and the Town of Haw River about the possibility of the Town absorbing some of Orange-Alamance's residential customers into its customer base. Orange-Alamance's largest remaining customer is the Cortina textile plant, which consumes in excess of 100,000 gpd, and is located in Swepsonville. In the past year, Orange-Alamance has agreed to provide water service to some proposed new subdivisions in Orange County such as the Richmond Hills subdivision (projected demand approximately 5500. gpd) and the Ashwick subdivision (projected demand approximately 10,000 gpd), while rejecting others such as the McGowan Creek subdivision (projected demand approximately 50,000 gpd). While it is clear that Orange-Alamance is not taking on new high demand large-scale residential developments or non-residential customers, it is not cleaz what criteria its board of directors utilizes to approve or disapprove the providing of service to smaller residential developments or businesses. Orange-Alamance is limited to a Stage I withdrawal of 820,000 gpd under the terms of the Ena River Capacity Use Agreement. As the water level iri Lake Orange decreases, Orange- Alamance's Eno River allocation may decrease to as little as 370,000 gpd under the most severe droughtllow flow conditions. During the last twelve years, Orange-Alamance's allocation has been reduced to 700,000 gpd on several occasions, once for nearly a month. For as much as six months per yeaz, it must rely on water from its wells and purchases of treated water from Hillsborough, or from Durham wheeled through Hillsborough, ar from Mebane to make up any shortfall between its Eno River allocation and well yield and the water demand of its customers. In the past (though not recently), Orange-Alamance has experienced operational or other difficulties in acquiring sufficient water supplies from Hillsborough and Mebane to meet its water demand, leading it to exceed its Eno River withdrawal restrictions. Given that its average S demand is 1.0 mgd and the capacity of its treatment plant is 1.0 mgd, Orange Alamance will from this point forward have to rely on its wells and water purchases to meet its demand even during those times when it is not impacted by low flow conditions in the Eno River. Conclusions There are a number of challenges that now face Orange-Alamance. Included in these is the probability that it soon needs to upgrade the equipment in its water treatment plant and that it faces a demand that often exceeds the treatment capacity of its Eno River plant. However, the mast serious issue that Orange-Alamance faces is a water supply that is insufficient to meet its growing demand. While Orange-Alamance has reduced demand by transferring some of its largest customers to other water systems and may continue to shift whole developments to other water utilities, it continues to gain small developments and individual customers. Same of the shortfall in its surface water supply and treatment capacity may be made up by the use of is ground water wells. However, even though initial indications are that these wells .yield high quality water and relatively high capacity (in excess of 100,000 gpd each) for this area, the quality and capacity of the wells have not been subject to the prolonged stress of constant use. Given the restrictions placed on Eno withdrawals by the Capacity Use Agreement, expanding the treatment capacity of the existing plant will not provide a solution for water supply shortages. Likewise, building another water treatment plant may not be a viable option since Orange-Alamance relinquished state and local protection far the Haw Creek watershed and its ability to develop a raw water intake there. Orange-Alamance does continue to seek guaranteed long-term treated and/or raw water sales agreements with other local jurisdictions with excess water treatment and supply capacity. However, it is unlikely that any jurisdiction will commit to an agreement that requires it to continue selling water to Orange-Alamance once its own surplus capacity has been expended. While Orange-Alamance does have serious water supply issues, in recent history it has not been subject to any regulatory sanction by the agencies that oversee its operations. Orange-Alamance continues to work with the Division of Water Resources to~complete the development of its Water Supply Plan. However, it is certainly conceivable that Water Resources and the Water Supply Branch could eventually impose a moratorium on new customers should Orange Alamance fail to secure guaranteed water supply sources that would serve to meet the system's demand in all but short term emergency situations. It is conceivable that commercial and residential build-out of the Efland-Cheeks community alone could create an additional water demand of 250,000 gpd. Under any circumstance or strategy currently under discussion, it is unlikely that the Orange-Alamance water system will be able to accommodate the water demand of the build-out vfEflond-Cheeks community or the Buckhom Raad Economic Development District. If I may provide additional information or answer questions, please advise. 6 9 Attachment "A" -Specific questions posed by Commissioner Jacobs 1. How was Orange-Alamance created, and within what parameters does it operate ? 2. What outside oversight is there of Orange-Alamance operations ? 3. What is the regulatory history of Orange-Alamance 7 4. Ys there an environmental danger in interbasin transfer of water ? S. Is there coordination with the Orange County Planning Department in extending lines ? 6. What is the standard process by which customers secure water service, and how are exception decided ? 7. Who appoints the Orange-Alamance board of directors ? S. Are there water pressure problems an any hydrants or other parts of the system 7 9. By what mechanisms are public concerns addressed by the Orange-Alamance board ? 10. Are Orange-Alamance board meetings public, and are they properly noticed ? 11. ,What are the utility's assets ? 12. How might the Orange-Alamance Water System be reconfigured to coordinate operations with other existing entities ?