Columbia answers state concerns about sewer debt

Published 12:44 pm Tuesday, March 24, 2020

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The Columbia Board of Aldermen on Mar. 16, decided to let the devastating facts speak for themselves in explaining to the state’s Local Government Commission why a debt service ratio in the town’s Water and Sewer Fund was not maintained throughout the 2019 fiscal year.

When the town borrowed $2.5 million to expand its wastewater treatment plant, it promised to maintain at all times a reserve equal to 110% of the annual bond payment.

The ratio fell to 43% during the fiscal year that ended last June 30 because Whitecap Linen Service closed in December 2018, midway of the fiscal year, reducing the town’s water and sewer services revenues by 25%, Town Manager Rhett White explained.

The LGC also wants to know how the town intends to correct the deficiency and assure future compliance with the bond order.

“That throws us in a quandary,” White said, because last December the Tyrrell Prison Work Farm transferred all its inmates elsewhere and effectively ceased operations, thus further reducing the town’s revenues even further.

Columbia still owes $2.074 million on the wastewater treatment plant bond.

White said the board’s response will point out the predicament caused by the prison closure. It will also stress that town officials are working with state legislators and their staffs to determine “if there can be legislative fix to this that will help us through this dilemma,” White stated.

It is uncertain how such a “fix,” if one materializes, will be structured, and for what duration. Meanwhile, the town will continue to provide water and sewer services to users, “operating as cost-effectively as we can,” White said.