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INDEPENDENCE — After months of negotiating back and forth, the Town of Independence has formally reached an agreement with the Virginia Department of Corrections for water to the new prison under construction.
Town Council received the contracts — signed by DOC Director Gene Johnson — at its regular meeting last Tuesday.
The agreement states that the DOC anticipates that it may need as much as 150,000 gallons per day, but will typically use around 120,000 gallons per day.
The town will extend water line construction to its 8-inch water main located on the south side of U.S. 58 to the prison property line, where it will terminate at a master meter. At that point, it will connect to DOC's on-site water system.
The line to the prison site will remain owned by the town, while the line from the master meter will be owned by the DOC, with the town having no responsibility for it.
In addition to the extended line, Independence has determined that it will need to replace some segments of the town's existing water lines.
Independence will first pay the estimated $417,500 to replace the lines, with the understanding that the DOC will reimburse the town for the actual cost once it is up and running. The payments will be part of the DOC's minimum monthly bill from the town.
In total, 4,650 linear feet of 8-inch water lines will be replaced or added to the town's water system.
The master meter, at the point where the water line crosses the property line to the prison will meter water flow into the prison.
The volume of water usage by the prison will be read monthly at the meter and the town will be responsible for recalibrating the meter from time to time as necessary, and provide documents to the DOC regarding each recalibration.
The DOC will reimburse the town for each calibration, if and when DOC requests it to be done.
Minimum monthly bill
The prison will be charged for its water in accordance with the town ordinance, and will be based on the town's out-of-town residential rates.
If the town later annexes the land where the prison is located, that rate would switch to an in-town rate.
The minimum monthly bill will consist of two parts:
• repayment to the town of the cost of the water main improvements described above. That cost will be paid by Independence with money from two sources, with the first being $150,000 borrowed by the town from the Grayson County Industrial Development Authority.
The remainder will be the town's own money.
DOC agrees to repay the town for the $150,000 with interest at 3 percent, in 18 equal monthly payments.
Upon completion of that repayment, the DOC will repay the town for the water main improvements with 4 percent interest in 120 equal payments.
• because the prison will equal the demand of 900 residential dwelling units, the second part of the minimum monthly bill will be equal to 900 times the then current minimum monthly rate for residents (currently that rate is $15 for the first 999 gallons, making the initial minimum monthly bill $13,500 for the first 899,100 gallons per month).
Additionally, the DOC will be required to pay for any usage above 899,100, at the out-of-town residential rate.
Currently, that rate is $5.63 per 1,000 gallons.
Because the DOC is subject to the Commonwealth's two-year budget cycle, the initial agreement on rates will be in effect until June 30, 2012.
Rates must be adjusted on a two year interval, with notification being delivered not later than July 1 of the year prior to the effective date of the rate changes.
The agreement calls for a minimum static pressure of 50 pounds per square inch.
Lane Engineering has been handling the engineering work for the new water system, and Bobby Lane was on hand during the meeting last Tuesday to ensure council that 50 psi was no problem.
With no comments or questions from council, Council Member Jason Cassell motioned to approve the contract. It was seconded by Council Member Ronnie Sexton and passed unanimously.