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Our View: City water sales

Lincoln County is once again looking closely at whether purchasing additional water supplies over and above the county’s current water resources from the city of Lincolnton would offer a better value for county taxpayers and water customers.
When this issue came up last year, we encouraged county leaders to think not only of the bottom line, but also of the importance of additional water customers for the long-term stability of Lincolnton. The county-city relationship is unique and the city’s predicament is also the result of a chain of events that put it in a tricky situation. (We’ll say “tricky situation” this year; we said “crisis” last year, which drew some objection for making the city appear to be in worse shape than it is. In fairness, the severity of the situation depends on which city official you ask and whether it’s an election year, but clearly additional city water customers would help.)
In the mid-1990s, state officials told the city it had to expand its water capacity to ensure ample supplies to meet the anticipated demand of growing local industrial and residential customer bases. They required the city to finance its investment in water infrastructure over a period of time, using the revenues from the sale of water as collateral. Under the terms of this agreement, the city can’t apply other revenues toward its payments on the water debt; it must use only water-system-generated revenues. At the time, those strict requirements didn’t seem too burdensome. But in the years that have followed, the biggest water users among the city’s industrial customers have closed shop. In recent years, the city has tried to pass some of those costs on to remaining customers. But because city leaders held off on rate increases over a period of years, the increases that were needed to catch up have been fairly painful for customers, especially those on fixed incomes.
Ideally, a new industry will come along offering to buy millions of gallons of water from the city, and putting Lincolnton’s booming population of unemployed citizens back to work. In the meantime, lending the city a hand remains in the county’s best interest.
County taxpayers on wells may have doubts about the fairness of this, as may county water customers in places like Denver. Some of them were only too happy to share their views of Lincolnton with the Times-News editorial staff after last year’s commentary on this subject, albeit not for print or in terms that would have been fit for print.
But Denver is economically a dud. While its high-end lakefront real estate helps the county’s tax base substantially, relatively few county residents can find jobs there. The western end of the county, while an agricultural powerhouse, has also failed to attract much industry. Instead it’s been in the center, in and around Lincolnton, where most employers are based and most job growth in recent years has occurred.  The county needs a strong and viable economy in Lincolnton. For the city’s economy to return to full health it needs, besides significant changes in Raleigh and Washington, a city water-debt situation that is less subject to uncertainty.
It may be that the county’s study of the situation will reveal that buying significantly more water from the city would be more cost-effective for the county. But even if it doesn’t turn out that way, commissioners should think carefully before walking away from such a potentially beneficial long-term partnership.

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