Part 1
As Mayor, I get recurring advice as to what the town should do, especially about operating our utilities. I respond to many of these ideas over and over again. But these ideas just don’t go away. I guess it is a form of public brainstorming, which is part of the creative process. This article is one of a two-part series where I will address some of these ideas.
Let me review a number of these proposals and affirm that the town has reviewed and has decided against doing them. On the positive side let me state what the town will, or already has done, in a particular area.
One idea that never goes away is that if the town restarted the old hydroelectric plant, many of our electrical problems, like power outages, would be solved. The resumption of the power plant has been studied and reviewed several times with the same outcome: it isn’t cost-effective or even possible.
The old power plant, built in 1929, could produce 1 megawatt of power on an optimum day. Highlands requires about 15 megawatts or more per day and, in the future, even more.
The nail in the coffin of restoring the old power plant below Lake Sequoyah is that the town no longer owns the power plant.
In 1929, the US Forest Service gave Highlands a special use permit to build and operate the plant. That permit ended in the 1960s when the town ceased power-generating operations. The old plant is on US Forest Service land and is now their property. We have no title, and getting a new special use permit isn’t feasible. It is also of note that after sixty years, the only this left of the Power Plant are stone walls.
So, the town will not get back into the hydro-generating business. But to improve the electric grid and create power supply redundancy, the town will invest about 4 million dollars in the next four years. This year, a new third transmission feed line from Duke Energy should be in place.
Another recurring suggestion is to bury all electrical lines for aesthetic purposes and secure electricity in major storms, like in the State of Florida. According to the Asheville Watchdog, Duke Energy and the North Carolina Utilities Commission jointly conducted a feasibility study in 2003 about burying main transmission lines in WNC. Estimates way back then indicated it would be a 41-billion-dollar project involving 1,500 workers and taking 25 years. The kicker is that the substations could not be buried and may not have survived a storm like Helene.
Power could still have been lost with even buried lines in major storms. With huge rock formations, the costs of burying lines in Highlands would be staggering. Unlike Florida, which sits on sandy dirt and easily buries power lines, ours can not be.
There was one outrageous customer immediately after the storm angry at me and the town about not restoring power immediately like he perceived Duke Energy had done in Cashiers. The main transmission line to Cashiers from the Thorpe Power Plant remained intact. The Duke transmission line to Highlands was not so fortunate. This person called Townhall to complain to the staff while they were in the midst of dealing with all the storm issues. This person told them the town was incompetent and should sell the electric system to Duke Energy. Beyond the obvious that Duke Power owning the Highlands system would not have prevented it from the rages of Hurricane Helene, selling our electric system to Duke is not a new idea. The board looked at that option years ago. They concluded Duke did not want to buy and operate a system that would be less than one-quarter of 1% of their total system. I would take issue with the notion that another company would operate our system better. We are the oldest municipal electric utility in this part of the state, with a 95-year history.
What we may do is enter another contract with an electrical provider by 2029 when the current Duke contract expires. The town will negotiate with potential wholesale electricity providers like Duke to secure the lowest rate possible to keep our customer costs as low as they are now.
Part 2
I get this idea presented to me almost every month. It goes like this. Mayor, if the town reduced residential garbage service to one day a week, operating costs and rates could be reduced. Never do I get the suggestion to cut daily commercial service, which is the source of those recurring sanitation deficits.
My response is always the same. Would the cost saving by going to one-day-a-week residential service be because worker hours would be reduced, or would it be a reduction in staff size, which is already at a barebones level, or a combination of both?
So, because of implementing the suggestion, a worker on the low end of the town wage scale, a person who is expected to have a CDL driver’s license, would work for the town 32 hours on a 4 day work schedule while other town workers would get 40 hours on a 5 day schedule. We have a hard enough time hiring sanitation workers as it is. Implementation of that suggested cost-saving measure would be a recruitment deal killer.
Staffing in the Sanitation Department is so low now that the town has to use road and electric trim crew workers to run garbage routes when we have sanitation workers out for illness, injuries, when there is a resignation, or a combination of all these situations. Twice a week, residential pickup also helps with removing trash in a timely manner in coping with our hungry bear friends.
Within our budget structure, there are the enterprise fund and the general fund budgets. A department in the enterprise fund category is expected to make enough money from service fees to pay for its operation and maintain a reserve fund, as in the case of the electric department. In recent years the sanitation department was running yearly deficits. At the advice of the town auditors, the board decided this past year to move the sanitation department to the general fund, where these self-sustaining measures are not in place. In short, when there is a deficit in sanitation costs, it is now covered by general tax revenues. That is not to say that sanitation rate increases are off the table in the future. I anticipate rate increases or property tax increases to help off set the deficits in the coming years.
Another idea is that the town should sell the sanitation department to a private company. Many metropolitan areas have already privatized garbage collection. It is an interesting idea, but the town is a small market with about 3000 collection accounts. Also, there is that expectation of continuing commercial collection, even on weekends, which is a unique practice for such a small town.
The town board and manager studied the possibility of privatization two years ago. Potential providers were contacted, but the decision was to continue as is. The concern was that if the town went out of the sanitation business, it would be for good, with the elimination of all those expensive vehicles and equipment. The concern was that as a small, isolated market a private provider might pull out of the area after a few years of deficits like the ones the town has incurred. In a private provider scenario, to cover the losses, rates might dramatically increase while service would be reduced. If the company stopped service, what would be the alternative? All the factors cited above caused the board to decide garbage collection was an essential service that the town must continue operating.
Finally, another recurring notion is that garbage, water and sewer, and electricity services should be fee-based services. Translated, a customer pays for only what is used, so a seasonal resident would pay for service only when in town. The problem is that Highlands, a very small town and market, requires the operation of these services at a general level all year long. The town has to charge a minimum fee regardless of how much power and water is used and how much garbage is collected. Our utilities are very akin to a co-op model in that everyone has to contribute to the continuous operation of the services. This plan works well now as many former seasonal residents can be described as back-and-forth transitional residents throughout the year.
The challenge facing the town currently is how to maintain these systems and expand services as demand constantly increases. Investments through grants are a major vehicle for meeting these challenges. In the past three years, we have received about 8 million dollars in state grants to improve our water department and water lines.