Lockwood Water, sewer district wraps up second phase of sewer project

by Evelyn Pyburn-Originally published in the print edition of the Yellowstone County News on 11/18/16.

LOCKWOOD — At last week’s Lockwood Water and Sewer District (LWSD) board meeting, the board issued a “final completion” determination to COP Construction for the Phase II Sewer project. A one-year warranty period is now in place.

LWSD made final payment to COP Construction for the Construction of Sewer Project Phase II. The project, like the first phase, was completed under the construction budget. The amount the district anticipated having to borrow to build the sewer was $6.5 million but because of savings the district had to borrow only $6 million, according to Mike Ariztia, LWSD manager.

“We didn’t have to tap into $500,000 in funding we had lined up,” he said.

Jill Cook of Morrison Maierle reported that engineering costs also came in $50,000 under budget. In addition the district was able to take advantage of the construction process to install water lines, which could be done at substantial savings by taking advantage of open lines and construction crews in the field for the sewer.

The water district put in new water lines to the tune of $1,363,000.

During the meeting the board got an update regarding the rate study that is being conducted for the sewer district. They urged the company conducting the study, Raftelis Financial Consultants, to “fast track” that portion of it that will deal with the charges the district will ask of ExxonMobil, to use the system. They are in the process of ironing out the details of an agreement that ExxonMobil is seeking to use the Lockwood sewer system to transport up to 2 million gallons of waste a day to the Billings treatment plant.

It was also suggested that perhaps the pending rate study could be used as incentive to encourage residents in Lockwood to hook up to the system sooner rather than later, when connection fees will undoubtedly be higher once changed after the study is completed.

Ariztia said that 55 properties in Phase II have connected to the system so far (average fees are $1,241.20). While the board is pleased with the rate of connections, Ariztia said that the level of connections to the sewer is nowhere near what was projected, which means they aren’t generating the level of revenue that was projected.

In the district’s discussions with the city regarding ExxonMobil and a request to expand the boundaries of the water district, they are also asking for changes in their contract that could result in savings to the district.

The district has been paying for a million dollar bond that the city of Billings required at the inception of their agreement with Lockwood to guarantee the District’s performance. LWSD claims that they now have a proven track record and would like the requirement for a bond dropped. Being able to do so would save the district $20,000 a year.  Ariztia said that the city has asked that the district submit a list of items they would like taken care of and the city will address them.

Another one of the changes the district hopes to achieve is a lowering of the reserve capacity fee that the district pays each month to the city. The fee had been $8,000 a month, but in July of this year, the city raised that fee to $22,000 a month. The district has been drawing from a coal tax loan to make the reserve capacity fee, until such time that revenues increase enough to cover it. At their meeting, the board approved extending that loan for another 18 months, until after the rate study is completed and the district’s revenue generating capacity has been determined.

Ariztia explained that after the June draw to cover the payments for July through December, there was only $34,000 left in that loan, and the current six-month payment is $151,000.

The city has no problem with Lockwood extending the boundary of its water district, said Ariztia, an action it anticipates being necessary as the community grows, especially if the TEDD is approved for the development of an industrial park.

The LWSD board approved sending a letter to Yellowstone County Commissioners expressing their support of the TEDD (Targeted Economic Development District). “The area will provide planned growth through a thoughtful process to improve infrastructure deficiencies based on area needs and increase the development options of area properties.”

The board approved engaging Morrison Maierle Engineers to take another look at the initial planning that was done for the district as they made their initial agreement with the City of Billings. The study will re-evaluate what the flows will be over the next 20 – 30 years and re-evaluate projections. It may make sense to relinquish some of the capacity the district has reserved with the City of Billings.

The board approved a credit card processing service that will allow the district to accept credit card payments. Until now, the district has only accepted cash or checks. The customers will have to pay convenience fees for the credit card service, but in the future they will be able to use cards over the counter, on the phone or online.

The board also approved the purchase of a new four-wheel truck. Ariztia said he had a bid for $31,642 for a Ford, extended cab, 3/4 ton, 4×4 truck. They may keep the two-wheel drive truck the new truck is intended to replace for back-up, he said.

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