Montevallo Water and Sewer Board

613 Valley St.

Montevallo, AL 35115

Dear Montevallo Water and Sewer Board Members:

The purpose of this letter is threefold: 1. to reiterate Bryan Pate’s 10-4-06 memo informing you of the corrected calculations by Insite Engineering for figures as of Aug. 2005; 2. to reiterate current existing sewer capacity; and 3. to request a financial plan and time-line for payment of capital projects.

In Aug. 2005, my analysis of data indicated that the Montevallo Sewer Treatment Plant would reach 90% of its capacity by adding 570 homes.  Mr. Pate’s analysis, completed later in August, 2005, concluded that 1,108 homes could be added.  Because of Mr. Pate’s analysis, Montevallo Water & Sewer Board, Montevallo Planning & Zoning Board and Montevallo City Council felt that my plea for a cautious and systematic approach to development was unjustified.

Using the most recently available information (9-30-05), Mr. Pate and I agree that about 600 homes may be added before the plant reaches 90% capacity. As the Board knows, over 1600 homes have already been approved by the Planning & Zoning Board and by the Montevallo City Council. Per the subdivision spreadsheet attached to Mr. Pate’s memo, about 239 homes have been built or are under construction.  This leaves about 360 homes to be built before reaching 90% capacity. The pace of new home development is uncertain.  Mr. Pate’s memo assumes 7% growth, but no one knows how quickly these homes will be built or how many additional residential developments may be approved (239 homes is over a 15% growth rate).

A plan must be submitted to ADEM about action taken when a plant is expected to reach 90% capacity, including how financing will be accomplished.  The Board estimates costs of:

1. Approximately $2 million to run the sewer line to the north end of the system to accommodate new residential growth;

2. Approximately $1 million to run (for the second time) the water line to the north end of the system to accommodate new residential growth;

3. An unknown, but substantial amount of money to expand the existing sewer plant. Insite Engineering broadly estimates the cost of plant expansion at no more than $8 million;

4. Around $320,000 for the extension of sewer to existing long-time residents of Montevallo in the Aldrich area;

5. An unknown amount needed for upgrade, repair and maintenance to the existing and aging system.

The Board has or will receive funds of:

1.      Approximately $2 million in impact fees;

2.      Approximately $4 million in bond proceeds;

3.      An unknown, and uncertain, amount from the federal government, a process that cannot even begin until 2008 according to numerous statements in W&S Board meetings.

Rates were raised 32% (according to the current bond prospectus, though the rate increase was publicized as a 17% increase) effective 10-1-05.  Rates were not raised in 2006. When and by how much does the Board expect to increase rates in the future?

What is the financial plan and time-line for these capital needs?  I understand these are difficult and complex issues and I also understand that this is a volunteer, essentially no-compensation Board, but these are questions the Board must face and respond to.  I thank you for your commitment to service for the City of Montevallo and look forward to your response.

Sincerely,

Denise A. Woodham

Cc:  Montevallo City Council Members

        Board of Planning & Zoning