A long drink of water

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By John Barnhart

    The Bedford Regional Water Authority (BRWA) is currently moving forward with a plan to supply water to Forest by treating water from Smith Mountain Lake and building a pipeline that runs all the way across the county. It sounds like a good project, from a technology point of view.
    The water would be treated at a new treatment plant that BRWA plans to build at the site of the former Camp 24. This plant uses the same technology that the current High Plant uses. It’s really cool! Instead of chemicals, it uses filters that literally squeeze the germs out of the water.
    The waterline to Forest would also provide the backup water supply for Bedford, required by the reversion agreement. This has some advantages over connecting Bedford to Lynchburg’s water system via running a line out U.S. 460 because it includes water customers who can generate the money to pay for it. Running the line out 460 would not include new revenue, so water rates would have to go up to pay for it.
    Running the line from Smith Mountain Lake to Forest would replace water purchased from Lynchburg’s water system to serve BRWA customers there. However, I think the physical connections with Lynchburg would stay in place and this could help improve water security for the whole region.
    The Camp 24 plant would, at maximum planned capacity, draw 12 million gallons per day out of Smith Mountain Lake. The Lake is such a massive reservoir that this would be like taking one drop out of a swimming pool.
    But, then, there’s the cost. The BRWA is sticking to a preliminary cost estimate of $34 million, and that’s a lot of money. Bill Piatt, of Bedford Above Board, claims that the actual cost is going to be much higher and debt service on the money that will have to be borrowed for the project will either result in a big boost in water rates, or a large county taxpayer subsidy for BRWA.
    Mr. Piatt e-mailed me 10 detailed financial sheets to back his position.
    Unfortunately, I really don’t have the background to analyze financial statements. My college major was Spanish, with a minor in secondary education and a teaching minor in history. The teaching minor included a U. S. economic history course, and a course in macro economics. That means I understand, in broad terms, how the economy works, but not the fine details of finance. I have a passion for history, which means my reading over the last 40 years has tended to be history. As far as financial stuff goes — well, the first time I succeeded in balancing my checkbook was when I first obtained computer software, back in the ‘90s, that did it for me.
    I looked at the material Mr. Piatt sent me and it was Greek to me. I thought of printing one of the PDFs and holding it upside down, to see if that would help, then decided it probably wouldn’t do me any good.
    Mr. Piatt helped me out by sending me the “dummies” version, along with an explanation. This indicates that the actual cost  of the project will be more like $57 million. According to his document, the $34 million estimate is achieved by removing eight items from the project. He includes financing assumptions that show interest rates of between 4 percent and 5.5 percent.
    BRWA has a number of documents posted on its website, but as was true of Mr. Piatt’s first set of documents, these might as well have been written in a foreign language for all the good they did me. Perhaps some of you out there who can speak Bean Counter will have better success than I did.
    But, even if BRWA’s $34 million preliminary estimate turns out to be close to the actual figure, it’s still a lot of money. I hope BRWA isn’t so committed to this project that it will go with it even if the cost ends up being a great deal more than that. They need to be very careful because the county can’t let BRWA financially fail. County taxpayers would certainly be on the hook for a bail-out if that ever threatens to happen.