Friday, November 16, 2007

Sewer Land Swap will proceed in Orange Beach

Orange Beach also restarts negotiations to lease Josephine area lines

Friday, November 16, 2007

By RYAN DEZEMBER Staff Reporter

ORANGE BEACH -- After a nearly 18-month delay, the city and Alabama conservation officials have set a date later this month to finalize a land swap that will allow construction of a new $20 million municipal sewer treatment plant, Mayor Pete Blalock said Tuesday.

The two sides plan to close the transaction Nov. 27, which will give Orange Beach 40 acres south of the city's current treatment facility on Canal Road while the state will get 46 acres of maritime forest to be added to the Gulf State Park.

The trade had been delayed first because of problems with appraisals used in the deal, and later because of a disagreement between the state and the federal government over whether the state land could leave Alabama's hands.

But Blalock said those issues have been resolved and the city, as soon as the swap is finalized, plans to begin building a plant that can treat 10 million gallons per day with the ability to be expanded to handle 15 million gallons daily. The current plant can treat 5.5 million gallons a day.
Last month, with the future of the new plant still up in the air, the City Council voted to stop promising wastewater treatment service to large developments for 180 days. The fear was that with the delays in building the new plant, the current facility might be overloaded by new condos and shopping centers.

Councilman Jeff Silvers said the city has contractors already lined up to clear the site, and that construction will likely take 18 months.

Also Tuesday, the city officials said that after putting the brakes on negotiations to lease its Josephine-area sewer lines to a private company, it would resume working out a short-term deal with Alabama Utility Services LLC.

Orange Beach now bills 817 customers in the area north of the Intracoastal Waterway that the company seeks to take over. Each of those customers is charged, like city residents, $20 per month.

The Pell City sewer company, which is building a treatment plant in the Lillian area, seeks to lease those lines from the city for the first few years it's open. That would not only give the company some business to start with, but it would provide the city's sewer system some relief until the new plant is finished, city officials have said.

The city would then be able to reclaim the lines when its plant is completed.

City Administrator Jeff Moon said that after the company's initial proposal last month, three council members expressed hesitancy to lease the lines because the company said that it would likely need to raise rates for existing customers.

Council members said a recent 68 percent rate hike by Baldwin County Sewer Service, a separate private provider, caused them some pause in dealing with a private company.
But Alabama Utility Services has now offered to keep rates level for existing customers while charging a separate city regulated rate to customers it hooks up to the lines, its lawyer David Whetstone said Tuesday.

"We can assure you that it would be in the $30 to $40 range, which I think is a very competitive rate," Whetstone said.

Whetstone, who is Gulf Shores' city attorney and a former Baldwin County district attorney, said the company will adhere to city building standards when adding on to the lines and would allow the council to regulate its rates for all customers.
"It will bring a new competitor to the area and I think a competitor is good for everyone," Whetstone said. "I think competition leads to lower prices."

Council members, without taking an official vote, gave City Attorney Wanda Cochran permission to restart negotiations with the sewer company.

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