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<br /> TOWN OF HILLSBOROUGH-STAFF INTERESTS
<br /> -- Regardiflg Orange County Area irought
<br /> August 14, 2002
<br /> Back"' pun pund on the West Fork no Reservoir: The Town's reservoir was designed and
<br /> permitted a supplemental water source for the of Hillsborough water system (Le., to provide
<br /> for the Town's water eeds over and a' •ve the allocation Hillsborough is ,. r i'fled via the
<br /> Capacity Use Agreement. Hillsborough voters apprcived a bond referendum 1993 to finance
<br /> the constmction of`the West Fork Reservoir. Subsequently, customers on the Town's system
<br /> (both. in-town and out-of-town) have been paw 5723,200 in annual debt service payments, in
<br /> addition to funding in excess of $500,000 in cash for the project The annual debt service
<br /> payments alone for i I's raj ect make.up approximately 25% of the annual water-.related
<br /> expenditures the FY03 F '03 Budget and approximately 15% of the entire Water & Sewer Fund
<br /> Budget As a result, Hillsborough comers (especially those who are out-o -tow customers
<br /> are paying some of the highest water rates i,n the smote.
<br /> The purpose of constructing the West Fork Reservoir was to 1) ii 1sboto . 's
<br /> dependency on its neighbors e.g., Durham and 'A'''AA to provide water to meet peak
<br /> demands, r i!uce the frequency and severity of water restrictions due to low flow conditions
<br /> the Eno, and allow the Town to accommodate reasonable amounts of growth in the future so ..
<br /> as to strengthen Hillsborough's h's low economy and diversify its tax base. in addition, fewer
<br /> customers are necessary to provide some "aconomits of Vie" so to help.share the financial
<br /> burden a M, the many fixed costs associated with operating a water system.
<br /> While not req d and not requested repested to do so, the Town started releasing additional water from
<br /> the West Fork Reservoir during Stage 4 so as to help slow the , Lake age and to
<br /> delay entry into more severe restriction stages i.e., Stage 5 and likely Stage 6). While the Town.
<br /> was is using about 1.0 — 1.1 D; it started releasing 1.0 MOD in addition to the minimal
<br /> required in-stream flow, increased the release to 1.5 MOD for a period, and is now releasing 1.1
<br /> MGD or the equivalent of the Town's average daily usage. Hillsborough has either been
<br /> releasing an amount equal to (or in excess) of the water it has been using for about three (3)
<br /> weeks. So, Hillsborough has essentially not used any water from Lake Orange in three weeks,
<br /> even though it's pitted up to a 1.1 MGD withdrawl during Stage 5. The Town did not make
<br /> the additional,releases with the intention of requesling any financial compensation from the other
<br /> . entities that are receiving any indirect/direct beneSt from this action. The additional releases
<br /> from Hillsborough have delayed what appears to be a likely entry into Stage 6, by,h l ` to
<br /> slow the water level drop in Lake Orange. While there are benefits for Hill b rou:' this has
<br /> also benefited the Piedmont Minerals and Orange-Alamance systems by delaying the miry into
<br /> Stage 5 where they had to reduce their t i wls from the Eno. Delaying the entry into Stage
<br /> 101 East Orange 'tre t • RO. Box 429 • Hillsborough, North Carolina 27278
<br /> 919432-1270 • Fax 919-6444390
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