Limestone County Water & Sewer Authority approves $23M bond issue

News Courier (Athens, AL)

Jan. 27--The Limestone County Water & Sewer Authority on Thursday unanimously approved a resolution to borrow $23 million in an effort to pay down old debt and pay for ongoing projects.

Jim Moffatt, chairman of the LCWSA board, said he recently participated in a one-hour phone call with Standard and Poors, which he deemed successful.

"They always ask questions that let you know they pay attention to what we're doing," he said.

The new bond issue will raise the authority's total debt to $96 million and will increase the annual debt service by $650,000. Broken down monthly, the LCWSA will pay an additional $54,000 per month toward paying off the debt.

A portion of the total $23.2 million will be used to refund the balance of a 2007 bond issue, set to be paid off on March 3.The remaining $18 million will be placed into the LCWSA's construction account.

Scott Bamman of bond underwriting firm Thornton Farish in Montgomery told the board paying off outstanding debt would free up a gross savings of about $640,000.

He said the authority has poured about $57.1 million into the system over the last six years through three previous bond issues and the $10 million sale of sewer line to the city of Huntsville.

Bamman said the major buyer of the new debt is State Farm, which he viewed as a positive sign. He explained the insurance giant backed out of the bond market after the Jefferson County water and sewer scandal but had eased back into it.

"They like North Alabama and they like water, sewer and electric," Bamman said, adding State Farm bought five maturities, which equals out to about $11 million of the $23.2 million bond issue. "It's nice to know one of the leading institutions (in the U.S.) is buying Limestone County's credit."

He also told the board the bond revenue should fund projects through the first quarter of next year. At that time, the board plans to borrow more money.

LCWSA Engineer Alton Hethcoat told the board projects are being staged so "we don't exhaust our bonds before we exhaust our projects."

Decatur Crossings update

In an update on the ongoing project to build a transmission line under the Tennessee River from Decatur Utilities, Hethcoat said he believes the project will be concluded in September.

Crews boring into rock under the river have to make four passes with each pass widening the hole for the 36-inch pipeline. The final pass will result in a 50-inch hole for the pipeline and should wrap up by the end of April.

New LCWSA CEO Daryl Williamson said work on a booster station for the pipeline is about 35 percent complete.

CEO update

Thursday's meeting was the first for Williamson, who was formally hired last month. In his update to the board, he said the system had not been actively utilizing leak detection equipment, but 76 leaks were repaired in December.

In discussing employee safety, he regarded recordable safety incidents as "high" and pledged to bring the number down. There was one incident in 2016 that resulted in three days away from work. Eight days of job transfer or duty restriction were also recorded as part of a work incident.

Williamson also shared a review of customer service findings, which included lobby traffic at the LCWSA customer service center on Jefferson Street. He explained an average of 3,800 payments are handled in the lobby each month, amounting to about 176 payments per day.

Other business

In other business, the LCWSA:

--Approved a $1.01 million contract with T J Construction Inc. of Florence for water line improvements to customers on Lester Road. Moffatt said the project came in lower than anticipated;

--Approved a resolution signifying the LCWSA would use bond funds, if necessary, to pay its portion of a project to run a water line to GE Aviation. The authority has applied for a grant through the U.S. Economic Development Administration Public Works & Economic Adjustment Assistance Fund Program to help cover the entire project cost. The authority's portion would be $1.4 million;

--Approved a policy amendment that would place an expiration date on construction plans approved by the LCWSA to ensure new installations match the most recent specification and design criteria. The expiration date will be one year from the date of approval as indicated on the plan review stamp or as indicated in writing;

--Accepted Phase 5 of the Olde Cobblestone subdivision in Huntsville-annexed Limestone County. The latest phase will include 17 lots to be served by LCWSA.

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