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HCSA turns down developers’ request to reduce fees

SoVaNow.com / June 19, 2017


After reviewing a request by two local developers, John Cannon and Christian Roberts, to lower connection fees for water and sewer to newly built homes, the Halifax County Service Authority decided Thursday to leave the current rates in place.

The HCSA board accepted a recommendation of its policy committee to leave unchanged the line connection fees: $1,250 for water and $1,500 for sewer.

Directors took the action after Cannon and Roberts approached the HCSA last month with a request to revert back to an earlier policy, in effect from 2008 to 2013, that set the connection fees at $750 for water and $750 for sewer.

Those were the fees charged by the Town of South Boston before the service authority was formed.

But members of the Policy Committee noted that under the requirements of USDA Rural Development, lender for the Maple Avenue wastewater plant renovation project, no change could be made that might affect the HCSA’s revenue stream. Doing so might run afoul of Rural Development lending rules, the directors said.

“We cannot jeopardize that loan,” said Gray Ramsey, a member of the HCSA policy committee.

Speaking again on the matter in their second appearance Thursday before the HCSA board, Cannon and Roberts argued that the high cost of connection fees threatened to choke off new home building in the authority’s service area.

“The cost of a tap fee imposes an additional burden on the developer,” Roberts said.

“As developers, we are helping the county generate additional revenue at our own expense. We need your help to make our county grow. Growth arises from land and economic development. At this point, the land developer is being pushed out of the equation by low property assessments, fees and no reimbursement for our investment in improving Halifax County,” Roberts said.

“My investment in water and sewer lines could potentially help provide the opportunity for additional land to be opened up for future development and this was done completely at my own cost.”

In developing the Townes of Greenstone, a new housing subdivision on Hamilton Boulevard near the hospital, Roberts said spent close to $1.4 million on infrastructure costs.

Cannon said he wanted to instruct authority members on some basics of Economics 101 —that it is essential for a community to offer housing opportunities that bring in new businesses. As part of that process, Cannon said, developers must be able to afford to build new subdivisions.

Prior to formation of the service authority, Cannon added, South Boston reimbursed developers and contractors for 80 percent of their infrastructure costs. Currently, the City of Danville is paying approximately $18,000 per lot to developers to build subdivisions; as a consequence, Danville is building new subdivisions, he said.

Cannon argued that in Halifax County, no new subdivisions are being built in the county or South Boston and that directly affects the recruitment of jobs in the area.

Recounting a conversation with Sentara Halifax Regional CEO Chris Lumsden, Cannon said he was informed how important it is have residential offerings like Edgewood townhomes in order to recruit personnel to the hospital.

Cannon said he paid out-of-pocket for infrastructure costs there, including water and sewer mains and stormwater mains.

If developers have to pay for this infrastructure without receiving any reimbursement, that simply means no new subdivisions will be developed once the reimbursements stopped, Cannon said.

HCSA directors noted they that understand the problem, but cannot go back on their agreement with Rural Development to shun operational changes that may cause any loss of revenue.

Members agreed to work with town and county officials to study what arrangements might be worked out to assist the developers.

In other public comment, a South Boston resident questioned why her latest bi-monthly water bill nearly doubled, from $169 to $345, once she lived alone after earlier having three family members living with her.

HCSA staff will be revisiting the issue to help the homeowner find out what might be causing the problem.

In other business, the Cowford Road wastewater treatment plant conversion and the Sutphin Road Interceptor projects are expected to be set for bid on Aug. 1, with an award to be made on Sept. 4. Contract negotiations are expected to last for six weeks. The HCSA plans to proceed with the work on Oct 24.

Board members were also advised that interim financing of $4.6 million for the projects will be provided by Benchmark Bank over a span of 30 months with a 2 percent interest rate.

Board members unanimously voted to re-elect Dexter Gilliam to serve as HCSA chairman for another year, with Stewart Nelson serving as vice chairman, executive director Mark Estes as secretary and Arnetta Roberts as treasurer.

Estes advised that the Authority is completing work on Vaughan Street sewer repairs, having already spent some $12,000 in putting in a new line over the past several months.

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