The financial future of the City of Greenup, says its mayor, Lundie Meadows, lies at its aging water plant.
The 40-year-old facility along Ky. 2 produces more than a million gallons of clean drinking water each day going out to more than 4,300 residential and business customers.
The plant generates revenue for the city but lately the plant has been draining money from city coffers at an alarming rate. For who knows how long, an estimated 45 percent of Greenup’s clean water had been flowing out of the system before it reached customers taps.
“It was unsustainable,” repeated Meadows and Chief Water Plant Operator Roy Riddle over and over again during a recent tour of the facility. Simply put, the leaks were wasting thousands of dollars in chemicals and electricity used to purify the drinking water and had been forcing the utility company to buy millions of gallons of water from the neighboring Cannonsburg Water District to meet demands.
The water plant itself was also in need of critical repairs and a few safety and communication upgrades in order to help it operate as efficiently as possible and divert what officials feared was pending disaster, said Riddle, who joined the city in February 2011.
In all, more than $125,000 for improvements and repairs has been pumped into the plant and the water distribution system over the last year. Officials now believe they are on a path to turn the situation around.
FINDING THE PROBLEM
Identifying the problem is always the first step to solving it.
When Meadows took office 18 months ago, the city had no idea how much water it was losing, he said. “We knew there was a problem, but we didn’t realize how big it was.”
The plant had no master meter, which calculates how much water is moved out of the plant. “We were using this little, tiny meter in the back next to the high service pumps,” Riddle said, explaining the meter “got them in the ball park” but wasn’t accurate.
After a few months of building up revenue for the purchase and installation of the master meter, the city began tracking how much it produced and how much it billed in order to calculate loss. A telemetry system that tracks water through the city’s network of pump stations and water tanks was also installed so Riddle can now track how much water goes where, when and how quickly it flows out of the system in real time. Together, the systems have helped spot troubling trends.
“When we first calculated it, we figured it somewhere around 36 percent loss, but after the Division of Water came in and we started crunching through all the numbers, we came up somewhere between 40 and 45 percent water loss. So, almost half of our water was leaking out on the ground,” said Riddle.
“It was unacceptable,” said Meadows, “You had money running on the ground.”
The DOWs acceptable rate of water loss is 15 percent.
ON THE GROUND
In order to meet customers’ demand, Greenup bought water from Cannonsburg, who in turn buys it from The City of Ashland.
City Clerk Jessica Gilliam demonstrated the problem with a sampling of bills over the last several years. In June of 2010, Greenup bought more than10 million gallons of water, racking up a bill of more than $25,000. In April of 2011, the cities racked up a $25,000 water bill, for less than 9.4 million gallons of water. In February 2011, the bill was a whopping $29,000 for more than 11.6 million gallons of water. During 2012, after the city began troubleshooting leaks, its bill has steadily dropped to an average of $13,000 to $15,000, said Meadows, but has been as high as $18,000.
The wholesale rate Greenup paid has also steadily risen over that time period too. In 2011, the rate was $2.66 per 1,000 gallons. It jumped last year to $3.13 per 1,000 gallons and on July 1, the rate went up again, to $3.67 per 1,000 gallons. “That is a lot of money we can spend on something else,” said Gilliam.
STAUNCHING THE FLOW
Over the last two years, the city has focused on finding and fixing the leaks.
Last summer, the city repaired a leak that was pouring water into the Little Sandy River at an estimated rate of 300 gallons per minute, or $12,000 worth of water a month.
Then in June, the city hired leak-finding expert Barry Back for $18,600, to provide for six months of water detective work to the city. Back uses sophisticated equipment to find leaks, most often underground, in creeks or in remote areas.
Before the city council hired him, Back more than paid the cost of his salary simply demonstrating his skills when he found two leaks — one on each side of the city’s Argillite tank the connection point of Cannonsburg Water — that were gushing a combined 61 gallons of water per minute. That’s over 2 million gallons a month, said Riddle. “That is this plant running for two and a half days, 24-hours a day,” he added.
Since those leaks were repaired Greenup has not purchased water from Cannonsburg Water District.
Gilliam is anxiously awaiting June’s bill from Cannonsburg to see the results in dollars and cents. “It won’t tell the whole story yet, she said. “They fixed the leaks around the 18th (of June), so this months isn’t going to be as low as we were anticipating but it is still cut in half,” she said.
Back is just getting started. Last week was his first full-week under contract.
As more leaks are found and fixed, cost savings will add up. Riddle said water retention has already improved enough to allow the plant to idle the plant up to five hours a day and rely on water it has stored in two clear wells at the plant. That saves electricity and lowers the wear and tear on the plant, which previously was running 24-hours a day, 356 days a year.
Meadows and Riddle have also overseen other upgrades at the plant, which have helped it more efficiently treat water. A new catwalk was installed so workers could eyeball all four of its filters, which also received much-needed maintenance. Two air compressors, one that was not working and another in such bad shape maintenance workers refused to service it due to a fear it would explode have also been replaced. The compressors are used to blow off the sludge that accumulates at the bottom of the plants clarifiers, a critical step in the purifying process.
In addition, a third high service pumps that allows workers to completely shut off the water flowing out of the plant was rebuilt and installed. If one of the existing two had gone down, explained Riddle, “We would have been dead in the water.”
Radios have also been installed at the plant and in water distribution vehicles to improve communications and save on fuel costs. Before, workers in remote areas often had to drive to an area with cell phone service to call in leaks, wasting gas and time. The city has also invested in its workers, helping one of its long time employees to get licensed and training other staff too.
“We have done a lot,” said Riddle, “But it is all stuff, if they had done it over the years as it had broken down it wouldn’t have been that bad, but they let it get to the shape that it was hanging by a thread.”
“It’s been a rebuilding process,” added Meadows.
THE BIG PICTURE
Controlling costs at the water plant, said Meadows, will be key to reducing the utility’s longstanding debts, which he sees as imperative to getting Greenup on strong financial footing. The city owes $4.8 million on its plant and water distribution system. Some 40-year bonds for phase one are 36-years-old, Meadows said. Others are much newer and have decades to go before they can be retired.
“Once we get stable financially, then we can go to bond holders and lenders and renegotiate those bonds for a lower interest rate, which will be a huge savings as well,” he said. “But until we get to that point where our credit is good more or less then we are just going to have to go day by day,” he added.
The city has also been borrowing from its utility fund for years to keep its general fund afloat and has underfunded its bond reserves. With the addition of its payroll tax, the city has already begun repay itself. Over the next fiscal year, officials estimate the bond reserves will get an infusion of $250,000, bringing it up to the city’s own legally required level. The utility’s depreciation fund will also rise by about $65,000, which will allow the city to have cash on hand for repairs and upgrades.
CARRIE STAMBAUGH can be reached at firstname.lastname@example.org or (606) 326-2653.
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