BEAUFORT — Carteret County commissioners agreed to a $7 million offer from Aqua North Carolina to purchase the county-owned and maintained water system serving around 1,200 customers.
The Carteret County Board of Commissioners met Feb. 15 to consider offers from two privately-owned water companies to purchase the system. Aqua N.C. was the high bidder over Carolina Water System’s offer of $4.9 million. Since the board accepted an offer, the county will proceed with an upset bid process, giving other companies a 10-day window to submit competing offers.
“I want to point out this is not a quick process if y’all decide to move forward with it, we understand it would be nine to 12 months,” Assistant County Manager Gene Foxworth told commissioners Monday. “There’s a lot of approval from the (N.C.) Utilities Commission and other due diligence that has to take place in this process.
“We’ll also need, if you decide to move forward, the authorization of the commissioners to go out and get an additional appraisal on the system,” he continued.
According to county maps, the water system serves residents of Highway 101 from near the Beaufort bypass to Harlowe, as well as North River
In May 2020, the county board accepted the results of a grant-funded study looking into the feasibility of merging the county’s water system with the town of Beaufort’s. The consultants on the study recommended Beaufort take ownership and operation of the county system in order to reduce costs to the county.
“This all started back in 2019, (when) we received a grant from the state to study merging our water system with the town of Beaufort’s, there was a push for regionalization of these facilities for efficiency,” Mr. Foxworth stated. “…We met with the town of Beaufort and they were not interested in acquiring our system. Subsequently, two private water companies approached us about acquiring our system.”
Beaufort Town Manager John Day said the town turned down the offer for two main reasons.
“One reason the town declined the offer was due to the proximity of many of the customers in relation to the town limits and the areas outside the town limits where the town has sewer customers – it’s a considerable distance,” he told the News-Times in an email. “Another was the numbers – we didn’t feel like they were strong enough. As I recall the only reason the system would break even was if two employees were laid off and the county continued to pay for the debt.”
According to the feasibility study, which was conducted by Draper Aden Associates, the county’s water system is valued at around $12.3 million, and the county has outstanding water debt totaling more than $2 million. The study also found the system’s operating expenses have exceeded revenues in recent years, with the deficit being subsidized by income generated by a special water tax district.
If Beaufort had agreed to the merger, the consultants recommended the county continue paying debt service on the water system until the debt is retired. Also, the study determined the merged system would only require one additional full-time and one part-time county employee to operate, compared to the three county employees currently staffed by the water system.
However, as Mr. Day indicated, Beaufort officials did not agree to the terms and turned down the merger, leading the county to look into other options.
In a letter addressed to County Manager Tommy Burns and dated Feb. 15, Aqua N.C. said if the county were to accept its offer, it would offer jobs to the three current employees. The company also said the move would save the county around $100,000 annually and would allow officials to eliminate the special 5.5-cent water district tax that’s currently in place to help fund the system.
Aqua N.C. did not specify if it would enact a rate increase for existing water customers, but noted customers would be able to participate in the regulated utility hearing process for future rate increases, which are subject to the review and approval of the NCUC.
Reporter's note: This article was updated Tuesday, Feb. 23, 2021, at 11 a.m. to include more information.
Contact Elise Clouser at firstname.lastname@example.org; by phone at 252-726-7081 ext. 229; or follow on Twitter @eliseccnt.