Managing water effectively has always been a prerequisite for growth. In 2008 an inability to handle wastewater threatened New Hanover County almost as much as the deepening Great Recession.
“Ten years ago, water quality was not on people’s minds. It was sanitary sewer overflows and massive sewer spills that had environmental effects, a chilling effect on development, and were costly to fix,” said Jim Flechtner, executive director of the Cape Fear Public Utility Authority.
Those spills were massive. On a July Fourth weekend in 2005, a large sewer pipe ruptured, spilling 3 million gallons of raw sewage into Hewletts Creek. A year later, over another July Fourth weekend, a fractured sewer pipe dumped 1 million gallons of sewage into the Cape Fear River.
The dire situation ended political wrangling between the city of Wilmington and New Hanover County regarding consolidation of the local sewer and water systems. The result was the creation in 2008 of the CFPUA, run by an 11-member board of directors.
Fixing the sewers was imperative for the new agency. The area was legally restrained from further development.
“A consent decree put a sewer moratorium in place. No one could get building permits. Developers were in a very bad position, and the sewer spills had created a negative drag on tourism,” said Mike Brown, CFPUA board chairman.
The group succeeded in rebuilding the infrastructure with dramatic reductions in what the industry calls SSOs, or sanitary sewer overflows.
“In our last five years of operation, compared to the five-year period before CFPUA, we’ve reduced the volume of SSOs by 94 percent. We went from over 11 million gallons spilled to 687,000 gallons,” said Flechtner, who has worked for the CFPUA since its creation.
Today the system is stable, but future breaks are unavoidable.
This month’s frigid weather cracked more than a half dozen 6- to 12-inch water mains, though fortunately not sewer lines. Rapid changes in temperature caused the metal pipes to expand and contract, severing the lines, CFPUA spokeswoman Peg Hall Williams said.
Flechtner said the utility works to prevent major breaks.
“We can detect minor leaks and the thickness of the pipes’ walls on our main water lines,” he said. “But on a smaller water line that has gotten brittle and breaks, that’s just part of the business we’re in.”
Rates and Investments
Maintaining 1,100 miles of water mains, 140 pump stations and four plants takes enormous amounts of time and money. Rates have risen and will continue to rise, officials said.
Brown defended the increases.
“Raising rates is never convenient or popular. However, the result is that we have our system on stable footing. Other utilities have not invested and will pay the piper. We also financed these projects during a low-interest environment,” he said.
Moody’s Investors Service recently upgraded CFPUA’s bond rating to Aa1, one notch below the highest level.
This improvement allowed CFPUA to refinance old city of Wilmington bonds and save more than $34 million over the next 20 years.
Flechtner noted that investments in infrastructure will continue to pay dividends for customers.
“Before the CFPUA was formed, the city and county had operating expenses of $38.7 million. In fiscal 2016, our operating expenses were lower at $36.6 million. And that’s with serving 11 percent more customers,” he said.
With New Hanover County ranking high in population density and second in area size among counties in the state, CFPUA officials say they are literally laying the groundwork for future development in the few places left.
“We’re making sure that as growth occurs, we’re ahead of it. We’re one of the local government services that can’t lag development,” Flechtner said.
For the 2018 fiscal year, the utility’s capital budget is $45.5 million. About 58 percent of spending will rehabilitate or replace infrastructure that is almost a century old. Remaining funds are for construction of the U.S. 421 water and sewer system and planning for the Castle Hayne water and sewer expansion.
“We worked with the county and Cape Fear Future in driving the U.S. 421 project. We’re expanding infrastructure to an underserved area, creating fertile ground for economic development,” Brown said. “And we’ll continue to pursue CFPUA cost-sharing developer agreements like the River Bluffs and RiverLights developments to further spur area growth.”
The U.S. 421 corridor will have access to 660,000 gallons of water a day from the Sweeney Water Treatment Plant. Construction should begin in March and finish by September of next year, Flechtner said. As for Castle Hayne development, he added, “We’re looking at different areas in Castle Hayne that are currently not served with water and sewer. We want to make sure that we have customers to use the services.”
GenX Challenges
CFPUA delivered more than 5 billion gallons of water to customers in 2016. About 15 percent of the raw or untreated water was sourced from two aquifers and the Cape Fear River. High-quality water was a given until GenX emerged into view last June.
The challenge facing CFPUA is how to filter out GenX and other unregulated chemicals at the Sweeney Water Treatment Plant that processes about 15 million gallons a day.
Even before GenX, the Sweeney plant was using a combination of ultraviolet and ozone to clean the water. Only a handful of plants around the state use this approach, according to Flechtner.
Currently, Black & Veatch, the designers of the Sweeney plant, and University of North Carolina Wilmington researchers are participating in a pilot test at the Sweeney plant. Different filters are being tested to measure their effectiveness at removing GenX and other compounds.
Using granular activated carbon and ion exchange technologies, results as of the end of December revealed a “total breakthrough of GenX and other short-chain per-fluorinated compounds with the test filter media,” officials said.
The results report also noted another issue. “As the media fills with compounds they have treated out of the water, they can begin to release older compounds back into the water,” stated a Jan. 11 update on the CFPUA website.
Flechtner underscored the difficulty of solving the GenX problem.
“The work we’re doing on GenX, no one has done before. We are the first ones. Six months ago, there was not even a test for GenX. When the original study came out, they were using tests for other compounds and drawing inferences,” he said.
Testing will continue until potential improvements are identified.
“We’ll make the decision whether to invest in plant improvement. It’s a decision that we, as a community, will have to make,” Flechtner said.
Regarding GenX, Brown paraphrased a quote from Michael Jordan that a mistake “is not a failure until you make an excuse.”
“With GenX, we definitely learned something,” Brown said. “I think we’ve accepted the challenge and own it and are trying our best.”
Up Ahead
For those wondering about future rates, the utility is transitioning to a financial policy involving less borrowing and more of what Flechtner calls a “pay-as-you-go” approach.
“To do this, we’ll need higher rates in the 2 percent to 2.5 percent range during the next three to four years. Over the long term, it will save us money since we are not issuing debt and paying interest,” Flechtner said.
For 2018, the utility will pay $11.3 million in interest on $263.6 million in debt. But the utility has also accumulated an estimated net asset position of $536 million, an increase from $350 million in 2009.
As for capital improvements, CFPUA plans to spend $396 million between now and 2027. Flechtner acknowledged that customers rarely see these investments.
“It is particularly difficult for us – you can’t see it; you can’t put your eyes on it since it’s mostly buried,” he said.
As for future raw water availability, a 2016 report from the N. C. Department of Environmental Quality offers a positive projection. By 2060, the report forecasts that New Hanover County’s population will swell to almost 400,000 and the area will be able to meet the demand for 38 million gallons of water each day.
