Originally created 08/22/06

City working to pay for dam deal



North Augusta has agreed to assume ownership of the New Savannah Bluff Lock and Dam. Now, however, the city must establish a way to finance its operation.

The city council took its first step in that direction at its Monday meeting by unanimously passing first reading of an ordinance to set up a management enterprise fund for the dam.

The city will use the enterprise fund to bill and collect operational costs from the governments and the industrial customers that draw water from the pool reservoir that is created by the dam.

The governments are North Augusta, Aiken County and Augusta. Four local industries - DSM Chemical North America Inc., General Chemical Corp., PCS Nitrogen and Kimberly-Clark Corp. - use the pool.

Under the proposed ordinance, the governments would contribute 60 percent of the total operations, maintenance and capital costs. North Augusta and Aiken County will contribute 15 percent each, and Augusta will be responsible for 30 percent of the costs.

Augusta's share is set at 30 percent because it has a consolidated government with Richmond County, said Charles Martin, the city administrator of North Augusta.

The commercial customers will pay 40 percent of the costs. Initially, the four local industries that use the pool will contribute 10 percent each of the overall costs.

Under the proposed ordinance, the commercial customers could change. No industry will be obligated to continue its financial contribution if it stops using the reservoir or if it is unable to continue its financial contributions. Under those circumstances, the remaining commercial customers will share proportionately in the unpaid costs.

"We don't have the same hook with this enterprise fund like we do with water and sewer, where we can actually turn off the water," Mr. Martin said. "If an industry chooses not to pay, then our best leverage is the other industries."

The ordinance also establishes a contingency account with an initial funding of $1 million to cover repair and rehabilitation costs.

In July, the city council adopted a resolution to sign a memorandum of agreement with the U.S. Army Corps of Engineers to transfer ownership of the facility. The corps will deed the aging dam, which was built in 1937, to North Augusta and to Aiken County after it makes initial repairs to the facility.

Reach Betsy Gilliland at (803) 648-1395, ext. 113, or betsy.gilliland@augustachronicle.com.