With the construction start date set for this spring, Cullman officials nailed down some financing specifics and discussed the pending land acquisition process for the Duck River dam project this week.

The Cullman Utilities Board currently plans to take out a $50 million bond for the first phase of the approximately $68 million project in the coming months, then fund the remainder via another bond in approximately two years. Officials hope to go out to the bond market by late May, according to a schedule released at a Monday meeting.

The exact amount of the second bond is not yet known, as officials hope to acquire federal funding for the project in the coming years to offset some of the cost.

Tom Harwell, with engineer of record CH2M Hill, said the bond report for the project is currently being written. The report, which will be pitched to investors, includes estimates of how water rates will change once the project is complete, and potential needs within the next 5-10 years. To pay back the bonds, wholesale water rates are slated to increase by approximately 59 percent — from $1.50 per 1,000 gallons this year to around $2.57 by 2016.

The effect growth would have on the system is also noted in the report, and states up to $14 million in potential upgrades and expansions could be needed at the city water treatment plant in the next five years if the system adds additional customers or witnesses a population boom.

“What that means is if the growth warrants it, it doesn’t mean you’re locked in to do it,” Harwell said. “It just shows there is a plan in place if it is needed.”

City council president Garlan Gudger, Jr., a member of the utilities board, clarified the report does not bind the council to make any upgrades, but instead provides a basic framework.

“The authority still rests with this board,” he said. “If we decided to do it, we can do it, but if not, then we won’t.”

Project liaison Dale Greer updated the board on his recent trip to Washington, D.C., on March 15-16 where he met with legislators in an effort to attain federal grants for the dam project. The board has applied for federal dollars in years past, though environmental lawsuits over the last decade delayed the project from starting. Now, in the midst of an economic recession, Greer noted that many of those sources have begun to dry up.

“We had some very positive meetings, and they were really pleased that all of the water systems are on board now,” he said. “But, they basically implied we’re two years away from being able to get any money.”

Property acquisition for the 89 landowner parcels within the watershed is scheduled to take place within the next four weeks, and land acquisition coordinator Mandell Tillman said he needs to be able to act quickly to close land purchases to keep the project on schedule, once appraisals and review appraisals are complete. To that end, the board approved chairman Wayne Fuller, board member Johnny Cook and the rest of the board’s finance committee to approve offers that arise between scheduled board meetings.

“We can’t make an offer until that price is approved by the board, so this would help streamline the process,” Tillman said. “But, relocations could hold up the negotiations, because there is a 90 day federal guideline after the initial offer is made. That’s where we could potentially be held up, and why it’s so important to get this going now.”

A potential cost-savings measure was discussed by owner’s representative Bill St. John, an engineer hired earlier this year by the utilities board. St. John said reworking the pipeline path down the U.S. Hwy. 278 right of way and around some county roads could make the process much simpler — reducing the amount of landowners affected from around 50 to five.

“We met with county commissioner (Darrell) Hicks and road superintendent Roy Jackson, and talked about using county roads to put the pipeline in, and had a really good meeting with them, and that should help keep us out of some private property easements and make that a lot easier,” he said. “That is a huge help, with the county being willing to do that.”

Once the Duck River dam is complete, the water source project will encompass a 640-acre lake with a 32-million-gallon-per-day capacity, and a six-mile pipeline. The reservoir will be located in the northeast portion of the county, east of Lake Catoma.



* Trent Moore can be reached by e-mail at trentm@cullmantimes.com, or by telephone at 734-2131, ext. 220.