Route 522 Corridor Water Reliability Project poised to move forward

At the Town Council work session of Monday, August 26, CHA consultant Steve Steele gave a presentation on the Route 522 Corridor Water Reliability plan. This plan has been in the works since 2011 when the contract with Dominion Power was signed. Dominion, perhaps the largest single Town central water user, has been a prime mover in seeking assurances a line break does not interrupt their cooling system necessary to maintain operations.

Several studies have been commissioned on the project, including the 2013 Pennoni Hydraulic Study, the 2014 Contract Water Rate Study, an initial 2017 CHA Reliability Study, and the consequent 2019 Feasibility Study. The goal has been to establish need, viability, and a best course forward to assure an efficient use of Town funds.

The current Water Corridor plan vs. the finished plan projected to be completed by 2024.

The project will, in addition to expanding water availability and assuring redundancy in the event of a main line break, will utilize the existing Manassas Avenue power station. Work session conversation indicated this will save the Town money, make use of previously Town-owned property, and make the construction process easier.

The Manassas Ave. pump plan

CHA and Steele’s earlier cost estimate was $12 million, a figure now shown from the 2019 study to be almost precisely at the current estimate. Steele said that between costs for the Electric Utility Route and the cost of Section 2, the total project cost will be $11.8 million, requiring an annual debt service payment of $653,000. At that price, the town will need to take out a loan from Virginia Resource Authority (VRA). Dominion Power has agreed to pay $3.5 million toward the total cost of the project.

Initially Dominion will pay the in-town rate on its water service before being charged the normal double out-of-town rate estimated to take its bill based on current usage from $275,000 to $550,000 annually in 2024.

With the Dominion contribution and anticipated water usage increases in the corridor over the term of the loan it was estimated in the best-case scenario that the Town could finish in the black by as much as $1 million. However, if future use does not meet increase projections the Town could finish in the red by an undetermined portion of the $8.3 million project balance it is responsible for.

Councilman Jacob Meza observed, “The alternative is to fund it ourselves, the best case scenario is that we make revenue off this project, and the worst case scenario is having to come up with the money for a project we already need to do.”

Interim Mayor Matt Tederick was hesitant to move forward without understanding how the Town could get a financing arrangement in which it actually made as much as a million dollars on the project.

Steele responded by explaining how the loans are based in revenue bonds created by localities coming together to cushion the blow of borrowing money by joining their loans together, essentially divvying up the cost between participating localities, driving individual costs down.

Steve Steele walks Council through the plan. Photo and video by Mark Williams, Royal Examiner.

The next steps for Council are to advertise to engineering bids in September; then Apply for VRA funding; with design work completed by October; pointing for a construction start by August 2020.

Find out all the details in this exclusive Royal Examiner interview with consultant Steve Steele:

Watch the entire presentation and Council discussion in the Royal Examiner video: