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City awards contracts for major Salisbury-Rowan Utilities upgrades

By Liz Moomey
liz.moomey@salisburypost.com

SALISBURY — Three projects for Salisbury-Rowan Utilities, along with a revenue bond, were approved and awarded to contractors Tuesday.

In January, the city council passed a resolution for the Salisbury-Rowan Utilities projects and advanced the $40 million package to the Local Government Commission. The city estimated $10 million is needed for the downtown water treatment plant’s improvements, which includes construction of a new building, site work, centrifuge installation and replacement filtration. The city on Tuesday awarded a $7.22 million contract with Dellinger, Inc.

Construction at Grant Creek Wastewater Treatment Facility in Spencer will include a new influent pump station, head works, grit removal system and other improvements. The project was estimated to be $20 million. The city awarded a contract to Adams-Robinson Enterprises, Inc. for $27.87 million.

A $10.5 million portion of the revenue bond will go to refinance fiscal year 2009-2010 debt.

“We’re excited about all these improvements,” said Mayor Karen Alexander.

Because the contracts came over budget, the revenue bond package cannot exceed $46.5 million, instead of the initial $40 million approved in January.

The Local Government Commission, which oversees debt of local governments in the state, approved the bond request Tuesday afternoon.

Local Government Commission members during a Tuesday meeting asked City Manager Lane Bailey about unit letters sent to the city with concerns of the Hotwire Fund, formerly called Fibrant. Hotwire Communications leases the city’s fiber-optic network and pays rent quarterly. In October 2018, the contract began.

The commission had a question about the broadband fund: Given how Hotwire preformed and what the alternative was, does the city feel this contract was a good deal?

“Absolutely, they’re better positioned with knowledge of the market than I am,” Bailey said.

Bailey said he is being conservative about his revenue projections for the city, but the numbers continue to get better. The city has began making more substantial contributions to the SRU fund, as a part of the interfund loan from the utility to the broadband network when it was known as Fibrant.

The Local Government Commission’s agenda including a letter on the financial position of the broadband fund.

“In 2029, the loan financing acquisition and standing up of the Broadband Fund will be fully paid and the financial position of the fund is anticipated to improve significantly,” the package stated. “The city’s response was considered satisfactory.”

Finance Director Shannon Moore told the city council on Tuesday that city has an improved bond rating, meaning it has a greater capacity to meet its financial commitment.

Chad Cowan of Hilltop Securities said bond interest rates are at the lowest point in recent history.

“I know these projects have been in the works for years,” Cowan said. “Your administration has timed this well.”

Jason Wilson, assistant utilities director, thanked the council for its support.

“We’re going to spend the money that you just authorized,” Wilson said.

Editor’s note: This article was updated 3:45 p.m. March 6 to correct the LGC’s concerns about the Hotwire fund. 

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