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---
type: document
title: Coalfield-Water
file: ../Coalfield-Water.pdf
tags:
- Cumberland_Plateau_Planning_District_Commission
docDate: null
contentType: application/pdf
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---
VIRGINIA COALFIELDS
REGIONAL WATER STUDY
FOR
LENOWISCO
PLANNING
DISTRICT
NOVEMBER 1998
Prepared by:
In Association With:
Dewberry & Davis - Lane Engineering - Kendrick Engineering & Surveying Co.
VIRGINIA COALFIELDS
REGIONAL WATER STUDY
FOR
Cumberland LENOWISCO.
Plateau PLANNING
Planning DISTRICT
District
NOVEMBER 1998
Prepared by:
—
Thompson
+Litton
Engineers
‘ati Architects
In Association With: Parnors
Dewberry & Davis - Lane Engineering - Kendrick Engineering & Surveying Co.
Virginia Coalfields Regional Water Study
Advisory Committee
Cumberland Plateau & LENOWISCO PDC’s
Wayne Watts, Co-Chairman - Buchanan County PSA, Executive Director
Jim Spencer - Tazewell County PSA, Administrator
Ron Phillips - Dickenson County PSA, Executive Director
Jerry Holbrook - Russell County Water & Sewer Authority, Superintendent
Talbert White - Swords Creek PSA, Chairman
Roger Rife - Buchanan County BOS, Chairman (CPPDC Chairman)
Roger Rose - Dickenson County BOS, Chairman
Danny Brown - Russell County BOS, Member
Don Payne - Tazewell County BOS, Member
Donald Baker - Town of Clintwood, Mayor
Norman Mullins - Town of Haysi, Mayor
C. H. Wallace - Town of Honaker, Mayor
Tim Taylor - Town of Richlands, Town Manager
Mike Duty - Town of Lebanon, Town Manager
Billy Hilton - John Flannagan Water Authority, Operator
Jim Sutphin, Co-Chairman - Lee County BOS Member (LENOWISCO Chairman)
Danny Buchanan - Wise County PSA, Executive Director
Doc Parsons - Lee County PSA, Executive Director
Jack Bush - Scott County WSA, Executive Director
Doug Stallard - Wise County BOS, Chairman
Tim Belcher - Lee County BOS, Chairman
Ken Hensley - Scott County BOS, Chairman
Belva Bolling - Town of Pound, Mayor
Bruce Robinette - Duffield Development Authority, GM
Greg Jefferson - Town of Wise, Waterworks Superintendent
E. W. Ward - Norton City Manager
Terry Gibson - Town of Coeburn, Town Manager
Earl Carter - Town of St. Paul, Waterworks Superintendent
Charles Hartgrove - Gate City Town Manager
George Polly - Big Stone Gap Town Manager
Marci Powers - Citizen Member
Ex-Officio Members
Sally Hamer - Rural Development District Office
Dickie Puckett - State Health Department, Abingdon Office
Donna Stanley - Coalfield Water Development Fund
John Daniels - Dept. of Housing & Community Development, Abingdon
Roger Williams - Abandoned Mine Land Water Program
Elaine Stinson - Southeast Rural Community Assistance Project
Tamin Younos - Virginia Tech Water Resource Center
Virginia Coalfields Regional Water Study
Advisory Committee
Cumberland Plateau & LENOWISCO PDC’s
Wayne Watts, Co-Chairman
Jim Spencer
Ron Phillips
Jerry Holbrook
Talbert White
Roger Rife
Roger Rose
Danny Brown
Don Payne
Donald Baker
Norman Mullins
C,H. Wallace
Tim Taylor
Mike Duty
Billy Hilton
Jim Sutphin, Co-Chairman
Danny Buchanan
Doe Parsons
Jack Bush
Doug Stallard
Tim Belcher
Ken Hensley
Belva Bolling
Bruce Robinette
Greg Jefferson
E. W. Ward
Terry Gibson
Earl Carter
Charles Hartgrove
George Polly
Marci Powers
Ex-Officio Members
Sally Hamer
Dickie Puckett
Donna Stanley
John Daniels
Roger Williams
Elaine Stinson
Tamin Younos
Buchanan County PSA, Executive Director
Tazewell County PSA, Administrator
Dickenson County PSA, Executive Director
Russell County Water & Sewer Authority, Superintendent
Swords Creek PSA, Chairman
Buchanan County BOS, Chairman (CPPDC Chairman)
Dickenson County BOS, Chairman
Russell County BOS, Member
‘Tazewell County BOS, Member
Town of Clintwood, Mayor
Town of Haysi, Mayor
‘Town of Honaker, Mayor
Town of Richlands, Town Manager
Town of Lebanon, Town Manager
John Flannagan Water Authority, Operator
Lee County BOS Member (LENOWISCO Chairman)
Wise County PSA, Executive Director
Lee County PSA, Executive Director
Scott County WSA, Executive Director
Wise County BOS, Chairman
Lee County BOS, Chairman
Scott County BOS, Chairman
‘Town of Pound, Mayor
Duffield Development Authority, GM
Town of Wise, Waterworks Superintendent
Norton City Manager
Town of Coeburn, Town Manager
Town of St. Paul, Waterworks Superintendent
Gate City Town Manager
Big Stone Gap Town Manager
Citizen Member
Rural Development District Office
State Health Department, Abingdon Office
Coalfield Water Development Fund
Dept. of Housing & Community Development, Abingdon
Abandoned Mine Land Water Program
Southeast Rural Community Assistance Project
Virginia Tech Water Resource Center
Virginia Coalfields Regional Water Study Executive Summary
November 1998 Page 1 of 5
EXECUTIVE SUMMARY
As a result of House Joint Resolution No. 590, the LENOWISCO Planning District Commission
(PDC One) and the Cumberland Plateau Planning District Commission (PDC Two) were the
recipients of an appropriation from the Virginia General Assembly for the completion of a
comprehensive regional water supply and service study for Virginia’s Coalfields region. The Virginia
General Assembly funded this study to perform a regional needs assessment for rural communities and
to address appropriate funding and implementation strategies.
This study, hereafter referred to as the Virginia Coalfields Regional Water Study (VCRWS), is the
result of a combined effort by the LENOWISCO and Cumberland Plateau Planning District
Commissions. The purpose of the Virginia Coalfields Regional Water Study is to develop and
evaluate, without regard to geographical or political boundaries, alternatives for regionalized water
systems capable of providing water service to previously unserved areas and improving service to
areas currently served. The alternatives include interconnections between existing and proposed
systems located within the two planning districts. The intent of this study is to look at
interconnections which would provide service to large groups of currently unserved citizens who
would not be candidates for inclusion in traditionally funded projects. In so doing, improved service
to existing systems in the form of improved reliability provided by secondary sources will be achieved.
When regional projects are considered, various economies of scale are realized. Economies of scale
are observed as projects increase in size. Combining several smaller projects into one larger regional
project results in savings in many ways, particularly when multiple systems share the same source of
water. Larger projects usually result in lower prices for the construction work. Administration, legal
and engineering costs are smaller percentages of larger projects. Long term operation and
maintenance costs are lower for each consumer if the number of consumers is higher. Costs may be
as much as ten to fifteen percent lower for one larger project than for several separate projects
serving the same customers.
Of special importance is finding ways of providing service to these large groups of households which
do not currently have clean, safe drinking water. Unless special attention is given to these areas,
public water supply may never be practical due to the distances and obstacles which must be
overcome, and the high costs of providing water service.
Nine regional projects were identified within the region. The total capital cost of all nine projects is
$83,352,669. The regional projects have been ranked in priority based on factors such as cost per
connection, construction feasibility, level of service, and degree of health hazard eliminated. Each
project is considered as a “stand-alone” project. However, a general look at overlap implications is
included. The total project cost has been presented for each project. Also, the present worth per new
connection has been presented to provide a comparative measure of the cost to benefit ratio of each
project. The present worth analysis provides a mechanism for accounting for all of the costs of the
system in the analysis. Present worth, as used in this report, is defined as the amount of money which
must be placed on deposit today at eight percent interest for twenty years to pay all the capital and
operation and maintenance costs for the planning period.
EXECUTIVE SUMMARY
As a result of House Joint Resolution No. 590, the LENOWISCO Planning District Commission
(PDC One) and the Cumberland Plateau Planning District Commission (PDC Two) were the
recipients of an appropriation from the Virginia General Assembly for the completion of a
comprehensive regional water supply and service study for Virginia’s Coalfields region. The Virginia
General Assembly funded this study to perform a regional needs assessment for rural communities and
to address appropriate funding and implementation strategies.
This study, hereafter referred to as the Virginia Coalfields Regional Water Study (VCRWS), is the
result of a combined effort by the LENOWISCO and Cumberland Plateau Planning District
Commissions. The purpose of the Virginia Coalfields Regional Water Study is to develop and
evaluate, without regard to geographical or political boundaries, alternatives for regionalized water
systems capable of providing water service to previously unserved areas and improving service to
areas currently served. The alternatives include interconnections between existing and proposed
systems located within the two planning districts. The intent of this study is to look at
interconnections which would provide service to large groups of currently unserved citizens who
would not be candidates for inclusion in traditionally funded projects. In so doing, improved service
to existing systems in the form of improved reliability provided by secondary sources will be achieved.
When regional projects are considered, various economies of scale are realized. Economies of scale
are observed as projects increase in size. Combining several smaller projects into one larger regional
project results in savings in many ways, particularly when multiple systems share the same source of
water. Larger projects usually result in lower prices for the construction work. Administration, legal
and engineering costs are smaller percentages of larger projects. Long term operation and
maintenance costs are lower for each consumer if the number of consumers is higher. Costs may be
as much as ten to fifteen percent lower for one larger project than for several separate projects
serving the same customers.
Of special importance is finding ways of providing service to these large groups of households which
do not currently have clean, safe drinking water. Unless special attention is given to these areas,
public water supply may never be practical due to the distances and obstacles which must be
overcome, and the high costs of providing water service.
‘Nine regional projects were identified within the region. The total capital cost of all nine projects is
$83,352,669. The regional projects have been ranked in priority based on factors such as cost per
connection, construction feasibility, level of service, and degree of health hazard eliminated, Each
project is considered as a “stand-alone” project. However, a general look at overlap implications is
included. The total project cost has been presented for each project. Also, the present worth per new
connection has been presented to provide a comparative measure of the cost to benefit ratio of each
project. The present worth analysis provides a mechanism for accounting for all of the costs of the
system in the analysis. Present worth, as used in this report, is defined as the amount of money which
must be placed on deposit today at eight percent interest for twenty years to pay all the capital and
operation and maintenance costs for the planning period.
Virginia Coalfields Regional Water Study Executive Summary
November 1998 Page 1 of 5
Virginia Coalfields Regional Water Study Executive Summary
November 1998 Page 2 of 5
A brief description of each of the projects, followed by a summary table illustrating the costs of each
is listed below.
Project 1 - Tri-County Water Project
This project considers constructing water mains to serve areas in Dickenson County, western
Russell County, and southeastern Wise County. The water mains would interconnect the
existing systems of the Wise County Public Service Authority, the Russell County Water and
Sewerage Authority systems of Dante and Castlewood, the Town of St. Paul, the Town of
Haysi, and the Town of Clinchco.
Project 2 - Eastern Russell County Water Project
This project considers constructing water mains to serve areas in eastern Russell County and
western Tazewell County. The water mains would interconnect the existing systems of the
Town of Honaker, the Swords Creek Public Service Authority, the Town of Lebanon, the
Tazewell County Public Service Authority systems of Raven-Doran and Wardell, and the
Town of Richlands.
Project 3 - Haysi to Honaker Water Project
This project considers constructing water mains to serve areas in Dickenson County, southern
Buchanan County, and eastern Russell County. The water mains would interconnect the
existing systems of the Town of Honaker, the Swords Creek Public Service Authority, and
the Buchanan County Public Service Authority, which serves the Town of Haysi.
Project 4 - Western Russell County Water Project
This project considers constructing water mains to serve areas in western Russell County and
southeastern Wise County. The water mains would interconnect the existing systems of the
Wise County Public Service Authority, the Russell County Water and Sewerage Authority
systems of Dante and Castlewood, the Town of St. Paul, and the Town of Lebanon.
Project 5 - Clintwood to Pound Water Project
This project considers constructing water mains to serve areas in Dickenson County and Wise
County. The water mains would interconnect the existing systems of the Wise County Public
Service Authority, the Town of Clintwood, and the Town of Pound.
A brief description of each of the projects, followed by a summary table illustrating the costs of each
is listed below.
Project | - Tri-County Water Project
This project considers constructing water mains to serve areas in Dickenson County, western
Russell County, and southeastern Wise County. The water mains would interconnect the
existing systems of the Wise County Public Service Authority, the Russell County Water and
Sewerage Authority systems of Dante and Castlewood, the Town of St. Paul, the Town of
Haysi, and the Town of Clinehco.
Project 2 - Eastern Russell County Water Project
This project considers constructing water mains to serve areas in eastern Russell County and
western Tazewell County. The water mains would interconnect the existing systems of the
Town of Honaker, the Swords Creek Public Service Authority, the Town of Lebanon, the
Tazewell County Public Service Authority systems of Raven-Doran and Wardell, and the
Town of Richlands.
Project 3 - Haysi to Honaker Water Project
This project considers constructing water mains to serve areas in Dickenson County, southern
Buchanan County, and eastern Russell County. The water mains would interconnect the
existing systems of the Town of Honaker, the Swords Creek Public Service Authority, and
the Buchanan County Public Service Authority, which serves the Town of Haysi.
Project 4 - Western Russell County Water Project
This project considers constructing water mains to serve areas in western Russell County and
southeastern Wise County. The water mains would interconnect the existing systems of the
Wise County Public Service Authority, the Russell County Water and Sewerage Authority
systems of Dante and Castlewood, the Town of St, Paul, and the Town of Lebanon.
Project 5 - Clintwood to Pound Water Project
This project considers constructing water mains to serve areas in Dickenson County and Wise
County. The water mains would interconnect the existing systems of the Wise County Public
Service Authority, the Town of Clintwood, and the Town of Pound.
Virginia Coalfields Regional Water Study Executive Summary
November 1998 Page 2 of 5
Virginia Coalfields Regional Water Study Executive Summary
November 1998 Page 3 of 5
Project 6 - Big Stone Gap - Appalachia - Norton - Lee County - Duffield Water Project
This project considers constructing water mains which would combine the existing systems of
Big Stone Gap, the City of Norton, and Appalachia into a regional system with the potential
of serving the Seminary and Olinger Communities in Lee County and potentially the Town of
Duffield in Scott County.
Project 7 - Clinch River Water Project
This project considers the construction of a new water treatment plant (WTP) on the Clinch
River to serve the Scott County Communities of Rye Cove, Daniel Boone, and the Towns of
Clinchport, Duffield, Gate City, and Weber City (Moccasin Gap). The Clinch River WTP will
be capable of providing water service to previously unserved areas and also to serve as a
backup water source for the existing water systems. Also included in this project is the
construction of a water main which would interconnect the existing water systems of Gate
City and the Moccasin Gap Water Authority. The interconnection would provide a backup
water source for each of the systems.
Project 8- Lee County - Jonesville West Water Project
This project considers constructing water mains to serve rural areas in western Lee County,
with a connection to the Jonesville, Rose Hill water system, and the Lee County Public
Service Authority systems in Ewing and Gibson Station.
Project 9 - Tazewell County - Wardell/Claypool Hill to Tazewell Water Project
This project considers constructing water mains to serve rural areas in central Tazewell
County, with a connection to the Tazewell County PSA system at the Town of Tazewell
system and the Wardell/Claypool Hill system, serving the area along Routes 19 and 460.
The following tables have been provided to list the potential costs and potential sources and
providers of water supply for the projects studied in this report.
Project 6 - Big Stone Gap - Appalachia - Norto1 ee County - Duffield Water Project
This project considers constructing water mains which would combine the existing systems of
Big Stone Gap, the City of Norton, and Appalachia into a regional system with the potential
of serving the Seminary and Olinger Communities in Lee County and potentially the Town of
Duffield in Scott County.
Project 7 - Clinch River Water Project
This project considers the construction of a new water treatment plant (WTP) on the Clinch
River to serve the Scott County Communities of Rye Cove, Daniel Boone, and the Towns of
Clinchport, Duffield, Gate City, and Weber City (Moccasin Gap). The Clinch River WTP will
be capable of providing water service to previously unserved areas and also to serve as a
backup water source for the existing water systems. Also included in this project is the
construction of a water main which would interconnect the existing water systems of Gate
City and the Moccasin Gap Water Authority. The interconnection would provide a backup
water source for each of the systems.
Project 8- Lee County - Jonesville West Water Project
This project considers constructing water mains to serve rural areas in western Lee County,
with a connection to the Jonesville, Rose Hill water system, and the Lee County Public
Service Authority systems in Ewing and Gibson Station.
Project 9 - Tazewell County - Wardell/Claypool Hill to Tazewell Water Project
This project considers constructing water mains to serve rural areas in central Tazewell
County, with a connection to the Tazewell County PSA system at the Town of Tazewell
system and the Wardell/Claypool Hill system, serving the area along Routes 19 and 460.
The following tables have been provided to list the potential costs and potential sources and
providers of water supply for the projects studied in this report.
Virginia Coalfields Regional Water Study Executive Summary
November 1998 Page 3 of 5
Virginia Coalfields Regional Water Study Executive Summary
November 1998 Page 4 of 5
Virginia Coalfields Regional Water Study
Cost Summary
Project
Number
Project
Name
Project
Cost
Present
Worth
Estimated
Number
of New
Connections
Present Worth
Per New
Connection
1
Tri-County Water Project
$ 6,200,000
$ 8,990,000
541
$ 16,617
2
Eastern Russell County Water Project
$ 17,328,000
$ 23,071,500
2,425
$ 9,514
3
Haysi to Honaker Water Project
$ 8,290,800
$ 10,804,800
1,380
$ 7,830
4
Western Russell County Water Project
$ 9,235,600
$ 11,861,700
1,404
$ 8,449
5
Clintwood-Pound-Wise County PSA Water Project
$ 3,491,700
$ 4,234,900
239
$ 17,719
6
Big Stone Gap-Norton-Appalachia-Lee County-
Duffield Water Project
$ 9,058,569
$ 9,976,200
605
$ 16,490
*7
Clinch River Water Project
$9,740,300
$ 11,228,000
572
$ 19,629
8
Lee County - Jonesville West Water Project
$ 14,865,100
$ 17,687,700
1,008
$ 17,547
9
Tazewell County - Wardell/Claypool Hill to Tazewell
Water Project
$ 5,142,600
$ 5,507,200
165
$ 33,377
TOTAL
$ 83,352,669
$ 103,362,000
8,339
$ 12,395
(average)
* Combination of Projects 7 and 7a.
Virginia Coalfields Regional Water Study
Cost Summary
Project Project Project Present Estimated Present Worth
Number Name Cost Worth Number Per New
of New Connection
Connections
1 Tri-County Water Project $6,200,000 | $8,990,000 S41 $ 16,617
2 Eastern Russell County Water Project $17,328,000 | $23,071,500 2,425 $9,514
3 Haysi to Honaker Water Project $8,290,800 | $10,804,800 1,380 $7,830
4 Western Russell County Water Project $9,235,600 | $11,861,700 1,404 $8,449
5 Clintwood-Pound-Wise County PSA Water Project | $3,491,700 | $4,234,900 239 $17,719
6 Big Stone Gap-Norton-Appalachia-Lee County- $9,058,569 | $9,976,200 605 $ 16,490
Duffield Water Project
7 Clinch River Water Project $9,740,300 | $11,228,000 572 $ 19,629
8 Lee County - Jonesville West Water Project $14,865,100 | _$ 17,687,700 1,008 $17,547
9 Tazewell County - Wardell/Claypool Hill to Tazewell | $5,142,600 | $5,507,200 165 $33,377
Water Project
TOTAL $ 83,352,669 | $ 103,362,000 8,339 $ 12,395
(average)
* Combination of Projects 7 and 7a.
Virginia Coalfields Regional Water Study
November 1998
Executive Summary
Page 4 of 5
Virginia Coalfields Regional Water Study Executive Summary
November 1998 Page 5 of 5
Virginia Coalfields Regional Water Study
Water Sources / Providers
Proj
ect
Number
Project
Name
Water
Source
Provider
1
Tri-County Water Project
Clinch River
Wise County PSA
2
Eastern Russell County Water Project
Clinch River/ Little River
Richlands / Tazewell Co. PSA
3
Haysi to Honaker Water Project
Flannagan Reservoir
John Flannagan Water Authority
4
Western Russell County Water Project
Clinch River / Big Cedar Creek
Wise County PSA / Lebanon
5
Clintwood-Pound-Wise County PSA Water Project
Flannagan Reservoir /
Clinch River
John Flannagan Water Authority /
Wise County PSA
6
Big Stone Gap-Norton-Appalachia-Lee County-
Duffield Water Project
Clinch River / Tributaries of
Powell & Guest Rivers
Big Stone Gap / Appalachia /
Norton / Wise Co. PSA /
Duffield Development Auth.
7
Clinch River Water Project
Clinch River
Scott County Water & Sewerage
Authority
8
Lee County - Jonesville West Water Project
Powell River
Jonesville / Arthur Sewanee
9
Tazewell County - Wardell/Claypool Hill to Tazewell
Water Project
Clinch River / Little River
Tazewell County PSA
Virginia Coalfields Regional Water Study
Water Sources / Providers
Proj Project Water Provider
ect Name Source
Number
1 Tri-County Water Project Clinch River Wise County PSA.
2 Eastern Russell County Water Project Clinch River/ Little River Richlands / Tazewell Co. PSA
3 Haysi to Honaker Water Project Flannagan Reservoir John Flannagan Water Authority
4 Western Russell County Water Project Clinch River / Big Cedar Creek Wise County PSA / Lebanon
5 Clintwood-Pound-Wise County PSA Water Project Flannagan Reservoir / John Flannagan Water Authority /
Clinch River Wise County PSA.
6 Big Stone Gap-Norton-Appalachia-Lee County- Clinch River / Tributaries of Big Stone Gap / Appalachia /
Duffield Water Project Powell & Guest Rivers Norton / Wise Co. PSA /
Duffield Development Auth.
7 Clinch River Water Project Clinch River Scott County Water & Sewerage
Authority
8 Lee County - Jonesville West Water Project Powell River Jonesville / Arthur Sewanee
9 Tazewell County - Wardell/Claypool Hill to Tazewell Clinch River / Little River
Water Project
Tazewell County PSA
Virginia Coalfields Regional Water Study
November 1998
Executive Summary
Page 5 of 5
Virginia Coalfields Regional Water Study Prioritization
November, 1998 Page 1 of 5
PRIORITIZATION
Based on the existing needs and the future water and sewer demands presented in this report there is
a significant need for water facility development within the Coalfields area over the 20-year planning
period. A need has been identified to rank the projects in order to maximize the benefits to the area.
Ranking criteria have been developed in order to assist in the prioritization of the proposed water
development projects identified in this report. These criteria were utilized in order to evaluate each
project with respect to the number of new water connections served, present worth per new
residential connection, elimination of health hazards, construction feasibility, the number of new
residential connections which may be eventually served by the new network of lines provided in this
study, and industrial/commercial growth potential. Each criteria was assigned a point value, which
was utilized to measure how well a proposed project meets and/or addresses the intent of the criteria.
A maximum of 100 points can be awarded to a project which satisfactorily meets and/or addresses
the intent of all of the ranking criteria. Weighting factors are built in to each of the evaluation criteria
based on their relative importance. The criteria were selected based on ranking criteria utilized by
various funding agencies that provide funding for water projects. The following sections address the
intent and related point values for each of the criteria.
Number of New Residential Customers Served by the Project (25 points)
The total number of new residential customers served by the project will be evaluated for each
project. Since the objective of this study is to serve new customers, projects that serve more
customers will receive more points.
This criteria shall be evaluated in accordance with the following point system:
0 to 499 new connections = 5 points
500 to 999 new customers = 10 points
1,000 to 1,499 new customers = 15 points
1,500 to 1,999 new customers = 20 points
more than 2,000 new customers = 25 points
Present Worth per Connection
The total present worth of a proposed project (including construction, related, and annual O&M
costs) will be evaluated with respect to the potential number of connections that will be served by the
proposed project. The lower the cost per connection the more points that project will receive under
this criteria.
This criteria shall be evaluated in accordance with the following point system:
PRIORITIZATIO!
Based on the existing needs and the future water and sewer demands presented in this report there is
a significant need for water facility development within the Coalfields area over the 20-year planning
period. A need has been identified to rank the projects in order to maximize the benefits to the area.
Ranking criteria have been developed in order to assist in the prioritization of the proposed water
development projects identified in this report. These criteria were utilized in order to evaluate each
project with respect to the number of new water connections served, present worth per new
residential connection, elimination of health hazards, construction feasibility, the number of new
residential connections which may be eventually served by the new network of lines provided in this
study, and industrial/commercial growth potential. Each criteria was assigned a point value, which
‘was utilized to measure how well a proposed project meets and/or addresses the intent of the criteria.
A maximum of 100 points can be awarded to a project which satisfactorily meets and/or addresses
the intent of all of the ranking criteria. Weighting factors are built in to each of the evaluation criteria
based on their relative importance. The criteria were selected based on ranking criteria utilized by
various funding agencies that provide funding for water projects. The following sections address the
intent and related point values for each of the criteria.
Customers Served by the Project (25 points’
Number of New Residenti
The total number of new residential customers served by the project will be evaluated for each
project. Since the objective of this study is to serve new customers, projects that serve more
customers will receive more points.
This criteria shall be evaluated in accordance with the following point system:
0 to 499 new connections = 5 points
500 to 999 new customers 10 points
1,000 to 1,499 new customers 15 points
1,500 to 1,999 new customers 20 points
more than 2,000 new customers 25 points
Present Worth per Connection
The total present worth of a proposed project (including construction, related, and annual O&M
costs) will be evaluated with respect to the potential number of connections that will be served by the
proposed project. The lower the cost per connection the more points that project will receive under
this criteria.
This criteria shall be evaluated in accordance with the following point system:
Virginia Coalfields Regional Water Study Prioritization,
November, 1998, Page 1 of 5
Virginia Coalfields Regional Water Study Prioritization
November, 1998 Page 2 of 5
$0 to $4,999 per connection = 25 points
$5,000 to $9,999 per connection = 20 points
$10,000 to $14,999 per connection = 15 points
$15,000 to $ 19,999 per connection = 10 points
$20,000 or more per connection = 5 points
Elimination of Identified Health Hazards
If a proposed project will minimize/eliminate an existing health hazard, a maximum of 10 points will
be awarded. Health hazards may include, but are not limited to, existing water systems with boil
water notices or well sources that have been determined to be surface water influenced. Additionally,
if a proposed project will provide potable water to an area that has poor water quality and/or poor
water quantity, a maximum of 10 points will be awarded. Poor water quality hazards may include,
but are not limited to, existing private well systems that have been contaminated by failing septic
systems. Poor water quantity hazards may include, but are not limited to, residential areas that haul
water or rely on cisterns. Proposed projects which do not target an identified health hazard will be
awarded 0 points with respect to this criteria.
Construction Feasibility
Construction feasibility considers whether a proposed project will be connected to an existing system
or whether it will be connected to another proposed project. If a proposed project can be connected
to an existing water treatment plant without requiring modifications to the existing plant it will be
awarded 10 points. If modifications are required to the existing water treatment plant prior to
construction of the proposed facilities, the project will be awarded 5 points. If proposed treatment
facilities must be constructed in order to provide a connection point for the project being evaluated 0
points will be awarded.
Residential Service Growth Potential
If a proposed project will potentially provide a source of water to permit the construction of other
facilities adjacent to the project as outlined in this study, it will be given a higher score.
This criteria shall be evaluated in accordance with the following point system:
0 to 499 potential connections = 4 points
500 to 999 potential customers = 8 points
1,000 to 1,499 potential customers = 12 points
1,500 to 1,999 potential customers = 16 points
more than 2,000 potential customers = 20 points
Industrial/Commercial Growth Potential
$0 to $4,999 per connection 25 points
$5,000 to $9,999 per connection 20 points
$10,000 to $14,999 per connection 15 points
$15,000 to $ 19,999 per connection = 10 points
$20,000 or more per connection 5 points
Elimination of Identified Health Hazards
Ifa proposed project will minimize/eliminate an existing health hazard, a maximum of 10 points will
be awarded. Health hazards may include, but are not limited to, existing water systems with boil
‘water notices or well sources that have been determined to be surface water influenced. Additionally,
if a proposed project will provide potable water to an area that has poor water quality and/or poor
water quantity, a maximum of 10 points will be awarded, Poor water quality hazards may include,
but are not limited to, existing private well systems that have been contaminated by failing septic
systems. Poor water quantity hazards may include, but are not limited to, residential areas that haul
water or rely on cisterns. Proposed projects which do not target an identified health hazard will be
awarded 0 points with respect to this criteria.
Construction Feasibility
Construction feasibility considers whether a proposed project will be connected to an existing system
or whether it will be connected to another proposed project. Ifa proposed project can be connected
to an existing water treatment plant without requiring modifications to the existing plant it will be
awarded 10 points. If modifications are required to the existing water treatment plant prior to
construction of the proposed facilities, the project will be awarded 5 points. If proposed treatment
facilities must be constructed in order to provide a connection point for the project being evaluated 0
points will be awarded.
Residential Service Growth Potential
If a proposed project will potentially provide a source of water to permit the construction of other
facilities adjacent to the project as outlined in this study, it will be given a higher score.
This criteria shall be evaluated in accordance with the following point system:
0 to 499 potential connections 4 points
500 to 999 potential customers 8 points
1,000 to 1,499 potential customers 12 points
1,500 to 1,999 potential customers 16 points
more than 2,000 potential customers = 20 points
Industrial/Commercial Growth Potential
Virginia Coalfields Regional Water Study Prioritization
November, 1998, Page 2 of 5
Virginia Coalfields Regional Water Study Prioritization
November, 1998 Page 3 of 5
If a proposed project will potentially provide service to designated industrial/commercial growth areas
as well as residential customers, it will be awarded 10 points. If a project will potentially provide
service to commercial growth areas as well as residential customers, but has little significant industrial
site development potential, it will be awarded 5 points. Projects that offer little to no potential for
economic growth of any significance will be given 0 points.
The following is a ranking table showing the scores for each of the projects:
Ifa proposed project will potentially provide service to designated industrial/commercial growth areas
as well as residential customers, it will be awarded 10 points. If a project will potentially provide
service to commercial growth areas as well as residential customers, but has little significant industrial
site development potential, it will be awarded 5 points. Projects that offer little to no potential for
economic growth of any significance will be given 0 points.
The following is a ranking table showing the scores for each of the projects:
Virginia Coalfields Regional Water Study Prioritization,
November, 1998, Page 3 of 5
Virginia Coalfields Regional Water Study
Ranking Matrix
Project
Number
Project
Name
Residential
Customers
Present
Worth per
Connection
Health
Concerns
Construction
Feasibility
Potential
Residential
Growth
Potential
Commercial/
Industrial
Growth
Total
Score
Potential
Rank
1
Tri-County Water Project
10
10
10
10
4
5
49
6
2
Eastern Russell County Water Project
25
20
10
5
8
10
78
1
3
Haysi to Honaker Water Project
15
20
10
10
4
0
59
4
4
Western Russell County Water Project
15
20
10
5
8
5
63
3
5
Clintwood-Pound-Wise County PSA
Water Project
5
10
10
10
4
5
44
7
6
Big Stone Gap-Norton-Appalachia-
Lee County-Duffield Water Project
10
10
10
5
8
10
53
5
7
Clinch River Water Project
10
10
10
0
8
5
43
8
8
Lee County - Jonesville West Water Project
15
10
10
10
8
10
63
2
9
Tazewell County - Wardell/Claypool Hill
to Tazewell Water Project
5
5
0
10
4
10
34
9
Virginia Coalfields Regional Water Study Prioritization
Virgi
ia Coalfields Regional Water Study
Ranking Matrix
Project Project Residential | Present Health | Construction | Potential | Potential | Total | Potential
Number Name Customers | Worth per | Concems | Feasibility | Residential | Commercial’ | Score | Rank
Connection Growth | — Industrial
Growth,
1 Tri-County Water Project 10 10 10 10 4 5 49 6
2 Eastern Russell County Water Project 25 20 10 5 8 10 B 1
3 Haysi to Honaker Water Project, 15 20 10 10 4 0 59 4
4 Western Russell County Water Project 15 20 10 5 8 5 683 3
5 Clintwood-Pound-Wise County PSA 5 10 10 10 4 5 44 7
Water Project
6 Big Stone Gap-Norton-Appalachia- 10 10 10 5 8 10 3 5
Lee County-Dutfield Water Project
7 Clinch River Water Project 10 10 10 0 8 5 4B 8
8 Lee County - Jonesville West Water Project 15 10 10 10 8 10 683 2
9 Tazewell County - Wardell/Claypool Hill 5 5 0 10 4 10 34 9
to Tazewell Water Project
Virginia Coalfields Regional Water Study
Prioritization
November 1998 Page 4 of 5
November 1998 Page 4 of 5
Virginia Coalfields Regional Water Study Executive Summary
November 1998 Page 4 of 5
The table which follows shows the priority ranking for each of the nine projects under
consideration:
Virginia Coalfields Regional Water Study
Priority Ranking
Ranking
Project
1
Eastern Russell County
2
Lee County - Jonesville West
3
Western Russell County
4
Haysi to Honaker
5
Big Stone Gap - Norton - Appalachia - Lee County - Duffield
6
Tri-County
7
Clintwood - Pound
8
Clinch River
9
Wardell to Claypool Hill
The table which follows shows the priority ranking for each of the nine projects under
consideration:
Virginia Coalfields Regional Water Study
Priority Ranking
Ranking Project
1 Eastern Russell County
2 Lee County - Jonesville West
3 Western Russell County
4 Haysi to Honaker
5 Big Stone Gap - Norton - Appalachia - Lee County - Duffield
6 Tri-County
7 Clintwood - Pound
8 Clinch River
9 Wardell to Claypool! Hill
‘irginia Coalfields Regional Water Study
Jovember 1998,
Executive Summary
Page 4 of 5
Virginia Coalfields Regional Water Study Introduction
November 1998 Page 1 of 3
INTRODUCTION
As a result of funding from House Joint Resolution No. 590, the LENOWISCO Planning District
(PDC One) and the Cumberland Plateau Planning District Commission (PDC Two) were the
recipients of an appropriation from the Virginia General Assembly for the completion of a
comprehensive regional water supply and service study for the Virginia Coalfields Regional area.
The Virginia General Assembly funded this study to perform a needs assessment for rural
communities and to address appropriate funding and implementation strategies. Also, as a result
of House Joint Resolution No. 592, the Virginia Water Resources Research Center at Virginia
Polytechnic Institute and State University is preparing a companion report which will study
innovative technologies and other options for providing drinking water to individual households
and small communities in southwest Virginia unlikely to be served by public water.
The intent of the comprehensive water study is to develop, without regard to geographical or
political boundaries, regional alternatives for water supply throughout planning districts one and
two. This study, hereafter referred to as the Virginia Coalfields Regional Water Study (VCRWS),
is the result of a combined effort by the LENOWISCO and Cumberland Plateau Planning District
Commissions.
In order to evaluate the Coalfields Regional Study Area (CRSA), an assessment of the needs of
rural citizens with little hope of water service from established central water providers is required.
Thompson + Litton was hired to assemble the necessary engineering and cost information to
evaluate potential sources of funding which might be available. Thompson + Litton has
supplemented the team with the engineering firms of Dewberry and Davis, Lane Engineering, and
Kendrick Engineering to assist with the preparation of the study.
To assist with the definition of the existing needs within the CRSA and to guide the engineering
team throughout the study, an advisory/review committee was established. The Planning District
Commissions felt it important that a representative sample of the stakeholders be involved in the
preparation of this report. This committee was comprised of Public Service Authorities (PSA)
staff, municipalities management staff, and Planning District Commission personnel from the
affected areas. Several members of political governing bodies with a potential stake in the study
were also invited to sit on this advisory committee. This committee was instrumental in defining
the projects that have been evaluated herein. A list of committee members is attached.
Purpose and Scope
Purpose
The purpose of the Virginia Coalfields Regional Water Study is to develop and evaluate
alternatives for regionalized water systems capable of providing water service to
previously unserved areas and improving service to areas currently served. The
alternatives include interconnections between existing and proposed systems located
within the two planning districts. The intent of this study is to look at interconnections
which would provide service to large groups of citizens who would not be candidates for
inclusion in traditionally funded projects. In so doing, improved service to existing
systems in the form of improved reliability provided by secondary sources will be
achieved.
‘RODUCTION
Asa result of funding from House Joint Resolution No. 590, the LENOWISCO Planning District
(PDC One) and the Cumberland Plateau Planning Distriet Commission (PDC Two) were the
recipients of an appropriation from the Virginia General Assembly for the completion of a
comprehensive regional water supply and service study for the Virginia Coalfields Regional area
The Virginia General Assembly funded this study to perform a needs assessment for rural
communities and to address appropriate funding and implementation strategies. Also, as a result
of House Joint Resolution No. $92, the Virginia Water Resources Research Center at Virginia
Polytechnic Institute and State University is preparing a companion report which will study
innovative technologies and other options for providing drinking water to individual households
and small communities in southwest Virginia unlikely to be served by public water.
The intent of the comprehensive water study is to develop, without regard to geographical or
political boundaries, regional alternatives for water supply throughout planning districts one and
two. This study, hereafter referred to as the Virginia Coalfields Regional Water Study (VCRWS),
the result of a combined effort by the LENOWISCO and Cumberland Plateau Planning District
Commissions.
In order to evaluate the Coalfields Regional Study Area (CRSA), an assessment of the needs of
rural citizens with little hope of water service from established central water providers is required.
‘Thompson + Litton was hired to assemble the necessary engineering and cost information to
evaluate potential sources of funding which might be available. Thompson + Litton has
supplemented the team with the engineering firms of Dewberry and Davis, Lane Engineering, and
Kendrick Engineering to assist with the preparation of the study.
To assist with the definition of the existing needs within the CRSA and to guide the engineering
team throughout the study, an advisory/review committee was established, The Planning District
Commissions felt it important that a representative sample of the stakeholders be involved in the
preparation of this report. This committee was comprised of Public Service Authorities (PSA)
staff, municipalities management staff, and Planning District Commission personnel from the
affected areas. Several members of political governing bodies with a potential stake in the study
were also invited to sit on this advisory committee. This committee was instrumental in defining
the projects that have been evaluated herein. A list of committee members is attached.
Purpose and Scope
Purp
a
The purpose of the Virginia Coalfields Regional Water Study is to develop and evaluate
alternatives for regionalized water systems capable of providing water service to
previously unserved areas and improving service to areas currently served. The
alternatives include interconnections between existing and proposed systems located
within the two planning districts. The intent of this study is to look at interconnections
which would provide service to large groups of citizens who would not be candidates for
inclusion in traditionally funded projects. In so doing, improved service to existing
systems in the form of improved reliability provided by secondary sources will be
achieved.
Virginia Coalfields Regional Water Study Tntroduetion
November 1998 Page 1 of 3
Virginia Coalfields Regional Water Study Introduction
November 1998 Page 2 of 3
Interconnections imply that existing water providers would be hooked together to provide
service to previously unserved areas. As an incidental impact, the reliability of each of the
existing water systems would be improved, permitting transfer of water from one to the
other in times of water shortage. The study area has been evaluated by looking for the
largest and most reliable sources of water. The most reliable sources in the study area
have been identified as the Clinch River, the Powell River, the North Fork of the Holston
River, and Flannagan Reservoir. Findings of the study indicate that water is available in
sufficient quantity in these sources to meet the needs of the citizens. Several of these
sources are existing Water Treatment Facilities with excess capacities, while others
include undeveloped or underdeveloped sources such as the Clinch River.
The study included a cooperative development of a list of projects to be studied. In
addition to the projects proposed by the study team, the planning districts’ staff and
advisory committee provided input relative to the particular alternatives slated for
evaluation. Inventories of existing systems will not be provided in this report. Data
developed by the 604(b) studies and other preliminary engineering reports has been
referenced in this study without being reproduced. Preliminary screening by the study
team and the advisory committee identified nine regional interconnection projects which
have been studied in sufficient detail to propose potential routes, capital and operational
costs, and implementation strategy.
Scope
Thompson + Litton has been commissioned to prepare this study with an emphasis on
obtaining data to be used in securing funding for regional projects which will have a
maximum impact on the region. As a planning document, the study only evaluates each
regional project in sufficient detail to assemble cost estimates. Use was made of the
available 604(b) planning documents which had previously been prepared for Lee County,
Wise County, Russell County, and Tazewell County. Reference has also been made to
several Preliminary Engineering Reports recently prepared for system improvements
within the study area. Broad brush preliminary engineering has been performed for the
areas which had not previously been studied.
Uniform cost estimating methodology was developed to prepare estimates for the projects
studied herein. Recognizing that construction costs may vary to some degree within the
study area, uniform unit pricing has been used to justify cost estimates. Unit pricing was
developed by averaging recent bid data from the entire area.
A detailed analysis of traditional funding sources has been performed. The means and
methods of securing funding as well as program goals and objectives of each of the
traditional funding sources have been examined.
Interconnections imply that existing water providers would be hooked together to provide
service to previously unserved areas. As an incidental impact, the reliability of each of the
existing water systems would be improved, permitting transfer of water from one to the
other in times of water shortage. The study area has been evaluated by looking for the
largest and most reliable sources of water. The most reliable sources in the study area
have been identified as the Clinch River, the Powell River, the North Fork of the Holston.
River, and Flannagan Reservoir. Findings of the study indicate that water is available in
sufficient quantity in these sources to meet the needs of the citizens. Several of these
sources are existing Water Treatment Facilities with excess capacities, while others
include undeveloped or underdeveloped sources such as the Clinch River.
The study included a cooperative development of a list of projects to be studied. In
addition to the projects proposed by the study team, the planning districts” staff and
advisory committee provided input relative to the particular altematives slated for
evaluation. Inventories of existing systems will not be provided in this report. Data
developed by the 604(b) studies and other preliminary engineering reports hasbeen
referenced in this study without being reproduced. Preliminary screening by the study
team and the advisory committee identified nine regional interconnection projects which
have been studied in sufficient detail to propose potential routes, capital and operational
costs, and implementation strategy.
Scope
Thompson + Litton has been commissioned to prepare this study with an emphasis on
obtaining data to be used in securing funding for regional projects which will have a
‘maximum impact on the region. As a planning document, the study only evaluates each
regional project in sufficient detail to assemble cost estimates. Use was made of the
available 604(b) planning documents which had previously been prepared for Lee County,
Wise County, Russell County, and Tazewell County. Reference has also been made to
several Preliminary Engineering Reports recently prepared for system improvements
within the study area, Broad brush preliminary engineering has been performed for the
areas which had not previously been studied,
Uniform cost estimating methodology was developed to prepare estimates for the projects
studied herein, Recognizing that construction costs may vary to some degree within the
study area, uniform unit pricing has been used to justify cost estimates. Unit pricing was
developed by averaging recent bid data from the entire area,
‘A detailed analysis of traditional funding sources has been performed, The means and
methods of securing funding as well as program goals and objectives of each of the
traditional funding sources have been examined.
Virginia Coalfields Regional Water Study Introduction
November 1998, Page 2 of 3
Virginia Coalfields Regional Water Study Introduction
November 1998 Page 3 of 3
Potentially, the most challenging issue in implementation of the regional projects described
in this study is the determination of ownership and operation procedures for the large
water distribution systems which will result when a project is completed. In many cases, it
may be desirable to create authorities which cross over traditional political boundaries. In
other projects, it may be more desirable to create an authority which governs only the
transfer of water from one current owner to another. It may also be possible for the
individual owners to create agreements which govern their working relationships with one
another. Input has been obtained from the advisory committee relative to these issues,
which, in many cases, will not be resolved during the production of this study. The goal
of the study will be to present as many workable options as can be found to give the
participants a base for beginning discussions at the inception of the project development.
Potentially, the most challenging issue in implementation of the regional projects described
in this study is the determination of ownership and operation procedures for the large
water distribution systems which will result when a project is completed, In many cases, it
may be desirable to create authorities which cross over traditional political boundaries. In
other projects, it may be more desirable to create an authority which governs only the
transfer of water from one current owner to another, It may also be possible for the
individual owners to create agreements which govern their working relationships with one
another. Input has been obtained from the advisory committee relative to these issues,
which, in many cases, will not be resolved during the production of this study. The goal
of the study will be to present as many workable options as can be found to give the
participants a base for beginning discussions at the inception of the project development.
Virginia Coalfields Regional Water Study Introduction
November 1998, Page 3 of 3
Virginia Coalfields Regional Water Study Methodology
November 1998 Page 1 of 5
METHODOLOGY
Present Worth Analysis
The cost of water system ownership can easily be separated into two categories. The first
category is capital cost, which is the measure of the cost to install a new system. Capital costs are
composed of “hard” costs, which include the price of new materials and the cost to install them.
“Soft” capital costs are those which are related to the construction costs, such as engineering,
legal, rights, and administration costs. A second cost of ownership of water systems is the annual
operation and maintenance cost. This is the continuous cost of operating the system and keeping
it in good repair. The present worth analysis provides a mechanism for accounting for all of the
costs of the system in the analysis. Present Worth, as used in this report, is defined as the amount
of money which must be placed on deposit today at eight percent interest for twenty years to pay
all the capital and operation and maintenance costs for the planning period.
Project Overlap
Ten potential projects have been identified within the CRSA. Each of the projects has been
studied as if it were a stand alone project. Impacts on existing sources of water were computed
for each project as if it were the only project which would impact that source.
However, in several instances, more than one project would have impact on a specific source of
water. For instance, the Tri-County, Western Russell County, and the Big Stone Gap-
Appalachia-Norton-Lee County-Duffield Water projects all look to the Wise County PSA
(Carfax) Water Treatment Plant near St. Paul as a potential source. If, for example, Carfax ends
up being the most logical source for the Wise County-Lee County-Duffield project, then Lebanon
and Castlewood may end up being a better choice for the Western Russell County project, which
may then impact the choice of a source for the Eastern Russell County project. Since one of the
major goals of this study is to maximize the use of our limited sources of water through
cooperative efforts, it is most important that all water providers coordinate their planning efforts
as these projects are addressed.
Accountability
Varying degrees of water system accountability may be found in the existing systems which were
evaluated in this study. Accountability is a severe problem in some systems in the study area,
many accounting for less than half of the water they produce. Determining the cause and cost of
leak repair is beyond the scope of this study. However, as each project enters a more serious
study phase, the effects of water leakage must be carefully considered. In many projects, it may
be found less expensive to repair leaky systems than to construct additional treatment capacity.
For the purposes of this study, the effects of leak repair and accountability improvement were not
considered, and existing production rates for current users were maintained into future
projections.
METHODOLOGY
Present Worth Analysis
The cost of water system ownership can easily be separated into two categories. The first
category is capital cost, which is the measure of the cost to install a new system, Capital costs are
composed of “hard” costs, which include the price of new materials and the cost to install them.
“Soft” capital costs are those which are related to the construction costs, such as engineering,
legal, rights, and administration costs. A second cost of ownership of water systems is the annual
operation and maintenance cost. This is the continuous cost of operating the system and keeping
it in good repair. The present worth analysis provides a mechanism for accounting for all of the
costs of the system in the analysis. Present Worth, as used in this report, is defined as the amount
of money which must be placed on deposit today at eight percent interest for twenty years to pay
all the capital and operation and maintenance costs for the planning period.
Project Overlap
Ten potential projects have been identified within the CRSA. Each of the projects has been
studied as if it were a stand alone project. Impacts on existing sources of water were computed
for each project as if it were the only project which would impact that source.
However, in several instances, more than one project would have impact on a specific source of
water. For instance, the Tri-County, Western Russell County, and the Big Stone Gap-
Appalachia-Norton-Lee County-Dutfield Water projects all look to the Wise County PSA
(Carfax) Water Treatment Plant near St, Paul as a potential source. If, for example, Carfax ends
up being the most logical source for the Wise County-Lee County-Dutfield project, then Lebanon
and Castlewood may end up being a better choice for the Western Russell County project, which
may then impact the choice of a source for the Eastern Russell County project. Since one of the
major goals of this study is to maximize the use of our limited sources of water through
cooperative efforts, itis most important that all water providers coordinate their planning efforts
as these projects are addressed.
Accountability
Varying degrees of water system accountability may be found in the existing systems which were
evaluated in this study. Accountability is a severe problem in some systems in the study area,
many accounting for less than half of the water they produce. Determining the cause and cost of
leak repair is beyond the scope of this study. However, as each project enters a more serious
study phase, the effects of water leakage must be carefully considered. In many projects, it may
be found less expensive to repair leaky systems than to construct additional treatment capacity.
For the purposes of this study, the effects of leak repair and accountability improvement were not
considered, and existing production rates for current users were maintained into future
projections.
Virginia Coalfields Regional Water Study Methodology
November 1998, Page 1 of 5
Virginia Coalfields Regional Water Study Methodology
November 1998 Page 2 of 5
John Flannagan Water Authority
The United States Army Corps of Engineers has notified the John Flannagan Water Authority of
various concerns relating to increasing the rate of withdrawal of raw water from the Flannagan
Reservoir. Several of the proposed projects would require an increase in this withdrawal rate.
The Corps of Engineers is currently studying the potential impacts. However, the results of the
study will not be available for inclusion in this study. Potential impacts could include a purchase
price for raw water, for which there is currently no charge. The impact of such a raw water
charge has not been factored into this study.
Engineering Assumptions
Several engineering assumptions have been made while developing the costs for the projects in
this study. The Virginia Department of Health (VDH) requires that detailed engineering studies
commence when a treatment plant reaches a daily production averaging more than eighty percent
of its rated capacity. Also, the requirement for beginning construction of expansion is tied to daily
production averaging ninety percent of rated capacity. Some of the proposed projects in this
study may cause the production at existing facilities to exceed the eighty or ninety percent
capacities. For the purposes of the study, the assumption was made that one hundred percent of
the capacity of existing facilities may be used in developing the new systems. Detailed engineering
studies during project planning should explore the effects of these rules on the proposed projects.
Another basic engineering assumption relates to sizing of storage tanks. Virginia Department of
Health Waterworks Regulations require that a minimum of 200 gallons of water be stored for
each connection to a public waterworks. Storage tanks for the proposed projects in this study
were sized using this criteria. However, in many cases, the volume of storage derived will not be
sufficient to provide fire flows. Also, water line sized to transfer water to meet domestic demands
will not be large enough to permit fire flows. For the purpose of the study, the assumption was
made that fire flow capability was not essential. Some fire flow may be possible in portions of
some of the projects, but fire flow was not used as the basis for design. Detailed hydraulic
analysis was not performed on any of the proposed projects. Planning for the proposed projects
should consider fire flow as each project develops.
New Regulations
The State of Virginia has the authority to regulate waterworks under the legislation Title
32.1, Chapter 6, Article 2, of the 1950 Code of Virginia, entitled "Public Water Supplies."
The state agency established as the primary enforcement of the Safe Drinking Water Act
is the Department of Health. This department has the responsibility of creating, amending,
and repealing regulations that ensure a supply of safe, pure drinking water. The document
that establishes the policies for all waterworks located within the State is known as the
"Commonwealth of Virginia State Board of Health Waterworks Regulations".
The Environmental Protection Agency (EPA) sets drinking water standards as required by
the Safe Drinking Water Act, amended in 1996. Several contaminant regulations have
since been implemented by the EPA. These regulations are listed below and include a
John Flannagan Water Authority
The United States Army Corps of Engineers has notified the John Flannagan Water Authority of
various concerns relating to increasing the rate of withdrawal of raw water from the Flannagan
Reservoir. Several of the proposed projects would require an increase in this withdrawal rate.
‘The Corps of Engineers is currently studying the potential impacts. However, the results of the
study will not be available for inclusion in this study. Potential impacts could include a purchase
price for raw water, for which there is currently no charge. The impact of such a raw water
charge has not been factored into this study.
Engineering Assumptions
Several engineering assumptions have been made while developing the costs for the projects in
this study. The Virginia Department of Health (VDH) requires that detailed engineering studies
commence when a treatment plant reaches a daily production averaging more than eighty percent
of its rated capacity. Also, the requirement for beginning construction of expansion is tied to daily
production averaging ninety percent of rated capacity. Some of the proposed projects in this
study may cause the production at existing facilities to exceed the eighty or ninety percent
capacities. For the purposes of the study, the assumption was made that one hundred percent of
the capacity of existing facilities may be used in developing the new systems. Detailed engineering
studies during project planning should explore the effects of these rules on the proposed projects.
Another basic engineering assumption relates to sizing of storage tanks. Virginia Department of
Health Waterworks Regulations require that a minimum of 200 gallons of water be stored for
each connection to a public waterworks. Storage tanks for the proposed projects in this study
were sized using this criteria. However, in many cases, the volume of storage derived will not be
sufficient to provide fire flows. Also, water line sized to transfer water to meet domestic demands
will not be large enough to permit fire flows. For the purpose of the study, the assumption was
‘made that fire flow capability was not essential. Some fire flow may be possible in portions of
some of the projects, but fire flow was not used as the basis for design, Detailed hydraulic
analysis was not performed on any of the proposed projects. Planning for the proposed projects
should consider fire flow as each project develops.
New Regulations
The State of Virginia has the authority to regulate waterworks under the legislation Title
32.1, Chapter 6, Article 2, of the 1950 Code of Virginia, entitled "Public Water Supplies.”
The state agency established as the primary enforcement of the Safe Drinking Water Act
is the Department of Health. This department has the responsibility of creating, amending,
and repealing regulations that ensure a supply of safe, pure drinking water. The document
that establishes the policies for all waterworks located within the State is known as the
"Commonwealth of Virginia State Board of Health Waterworks Regulations"
‘The Environmental Protection Agency (EPA) sets drinking water standards as required by
the Safe Drinking Water Act, amended in 1996. Several contaminant regulations have
since been implemented by the EPA. These regulations are listed below and include a
Virginia Coalfields Regional Water Study Methodology
November 1998, Page 2 of 5
Virginia Coalfields Regional Water Study Methodology
November 1998 Page 3 of 5
brief explanation, as well as the impact of these rules on the potential water systems
evaluated in this study.
Surface Water Treatment Rule
The Surface Water Treatment Rule requires that all utilities served by surface
water and/or groundwater under the direct influence of surface water must comply
with the requirements of this rule. The rule establishes criteria which provide
optimum protection from contamination due to microbial invasion. The
"Waterworks Regulations" previously required filtration of all surface water
supplies. The primary impact will be on spring and well sources that are deemed
by the State to be surface water influenced. Once a source is considered surface
water influenced, the waterworks has eighteen months to do one of two things:
provide filtration for the water supply, or find an acceptable alternate supply.
A small protozoan organism, known as Cryptosporidium, is included in the
Enhanced Surface Water Treatment Rule. Public concern of disease outbreaks
caused by Cryptosporidium has lead to the encouragement of regulation of the
organism. If this rule is modified to require a higher degree of filtration, it could
have an impact on all potential water treatment plants within the study area.
Total Coliform Rule
Maximum contaminant levels for total coliform bacteria, known as the Total
Coliform Rule, was created in December of 1990. Both surface water and
groundwater must be monitored, with the sampling requirements being based on
the population served.
This regulation does not have a significant impact on public waterworks systems
since it has been successfully implemented over time, but some unchlorinated
private systems may require the use of chlorination to consistently meet this rule.
brief explanation, as well as the impact of these rules on the potential water syst
evaluated in this study.
Surface Water Treatment Rule
The Surface Water Treatment Rule requires that all utilities served by surface
water and/or groundwater under the direct influence of surface water must comply
ith the requirements of this rule. The rule establishes criteria which provide
optimum protection from contamination due to microbial invasion, The
"Waterworks Regulations” previously required filtration of all surface water
supplies. The primary impact will be on spring and well sources that are deemed
by the State to be surface water influenced. Once a source is considered surface
water influenced, the waterworks has eighteen months to do one of two things:
provide filtration for the water supply, or find an acceptable alternate supply.
A small protozoan organism, known as Cryptosporidium, is included in the
Enhanced Surface Water Treatment Rule. Public concer of disease outbreaks
caused by Cryptosporidium has lead to the encouragement of regulation of the
organism, If this rule is modified to require a higher degree of filtration, it could
have an impact on all potential water treatment plants within the study area.
Total Coliform Rule
Maximum contaminant levels for total coliform bacteria, known as the Total
Coliform Rule, was created in December of 1990. Both surface water and
groundwater must be monitored, with the sampling requirements being based on
the population served,
This regulation does not have a significant impact on public waterworks systems
since it has been successfully implemented over time, but some unchlorinated
private systems may require the use of chlorination to consistently meet this rule
Virginia Coalfields Regional Water Study Methodology
November 1998,
Page 3 of 5
Virginia Coalfields Regional Water Study Methodology
November 1998 Page 4 of 5
Lead and Copper Rule
Waterworks must provide non-corrosive water to their customers through the
requirements of the Lead and Copper Rule. This rule was established in order to
prevent soluble lead and copper contamination. A requirement of this rule states
that the water supplier must obtain samples from the customer's interior plumbing
system at locations appearing to be most susceptible to corrosion problems.
Treated water with low pH, hardness, and alkalinity values is the most likely to
have problems meeting this requirement. Waterworks exceeding the level of
0.015 mg/l lead or 1.3 mg/l copper must implement a corrosion treatment plan and
begin a public education program.
Phase II and V Rules
The Phase II and V Rules establish maximum contaminant levels for 76
contaminants including synthetic organic chemicals (SOCs), volatile organic
chemicals (VOCs) and inorganic chemicals. This regulation requires that the
water system be tested for inorganic contaminants once per year for surface
waters and once every three years for groundwater. It also requires that the water
system be monitored quarterly for three years for organic chemicals.
Radionuclides Rule
The proposed Radionuclides Rule will address contaminants such as uranium,
radium, radon, gross beta particle and photon emitters and gross alpha emitters.
Monitoring is required which specifies quarterly samples every four years.
Finalized rules on radium and uranium are to be completed by December, 2000.
Disinfectant/Disinfection By-Product Rule
The Disinfectant/Disinfection By-Product Rule was proposed in July, 1994. This
Rule contains two stage provisions and is the result of a negotiation process.
Maximum contaminant levels (MCLs) must be met when using either chlorination
or ozonation systems. Systems with poor raw water quality must begin sampling
for Giardia and Cryptosporidium. Log removal levels will then be determined by
using this data. Stage One establishes maximum contaminant levels for total
organic carbon, total trihalomethanes, and total haloacetic acids.
Stage Two of this proposed rule will be based on research that will determine the
most cost effective methods to reduce total contamination and by-products
associated with disinfection. Stage Two will be completed before the criteria for
Stage One are finalized.
Lead and Copper Rule
Waterworks must provide non-corrosive water to their customers through the
requirements of the Lead and Copper Rule. This rule was established in order to
prevent soluble lead and copper contamination. A requirement of this rule states
that the water supplier must obtain samples from the customer’ interior plumbing
system at locations appearing to be most susceptible to corrosion problems.
Treated water with low pH, hardness, and alkalinity values is the most likely to
have problems meeting this requirement. Waterworks exceeding the level of
0.015 mg/l lead or 1.3 mg/l copper must implement a corrosion treatment plan and
begin a public education program.
Phase II
ind V Rules
The Phase II and V Rules establish maximum contaminant levels for 76
contaminants including synthetic organic chemicals (SOCs), volatile organic
chemicals (VOCs) and inorganic chemicals. This regulation requires that the
water system be tested for inorganic contaminants once per year for surface
waters and once every three years for groundwater. It also requires that the water
system be monitored quarterly for three years for organic chemicals.
Radionuclides Rule
The proposed Radionuclides Rule will address contaminants such as uranium,
radium, radon, gross beta particle and photon emitters and gross alpha emitters.
Monitoring is required which specifies quarterly samples every four years.
Finalized rules on radium and uranium are to be completed by December, 2000.
Disinfectanv/Disinfection By-Product Rule
The Disinfectant/Disinfection By-Product Rule was proposed in July, 1994, This
Rule contains two stage provisions and is the result of a negotiation process.
Maximum contaminant levels (MCLs) must be met when using either chlorination
or ozonation systems. Systems with poor raw water quality must begin sampling
for Giardia and Cryptosporidium, Log removal levels will then be determined by
using this data, Stage One establishes maximum contaminant levels for total
organic carbon, total trihalomethanes, and total haloacetie acids.
Stage Two of this proposed rule will be based on research that will determine the
most cost effective methods to reduce total contamination and by-products
associated with disinfection, Stage Two will be completed before the criteria for
Stage One are finalized.
Virginia Coalfields Regional Water Study Methodology
November 1998,
Page 4 of 5
Virginia Coalfields Regional Water Study Methodology
November 1998 Page 5 of 5
Conventional systems that treat and supply water to study area residents will be
required to operate with "enhanced coagulation" unless the TOC concentration in
the filtered water is less than 2.0 mg/l. Enhanced coagulation will require that the
system must remove a yet undetermined amount of organics in the coagulation
process. Systems serving fewer than 1,000 people will not be required to meet
this proposed rule until 1999.
Groundwater Disinfection Rule
The proposed Groundwater Disinfection Rule (GWDR) requires that water
suppliers using groundwater as a source must provide disinfection. It is expected
to require continuous chlorine residual monitoring for systems that provide service
for a population of 3,300 or more. Systems can obtain a waiver to this rule if
certain criteria are met, such as meeting one or more of the natural disinfection
criteria and all of the other prequalifying conditions. Most public water systems
provide disinfection to water before distribution, but many of the private water
systems will be affected by this rule unless they qualify for the waiver previously
mentioned. The conditions for receiving a waiver are contained in the
Groundwater Disinfection Rule Amendment to the Safe Drinking Water Act of
1996.
Arsenic Rule
The Safe Drinking Water Act of 1996 has required that a proposed Arsenic Rule
be established by January, 2000, and a final rule be in effect by January 2001. The
rule is proposed to place limitations on the amount of arsenic in the water supply.
However, the cost for treating low concentrations of arsenic is high and the
overall health effects are not completely known. Monitoring is required and will
occur once per year for surface waters and once every three years for
groundwater.
Filter Backwash Recycling Rule
The purpose of the Filter Backwash Recycling Rule is to prevent the return of
heavily concentrated contaminants removed by filters into a water system. This
rule may be a part of the Enhanced Surface Water Treatment Rule (ESWTR).
Sulfate Rule
The purpose of the proposed Sulfate Rule is to regulate the amount of sulfate in
public water systems. This rule was proposed in December, 1994. Prior to
issuing a final Rule, research on the health effects of sulfate must be conducted.
This research is expected to be completed by January, 1999.
Conventional systems that treat and supply water to study area residents will be
required to operate with "enhanced coagulation" unless the TOC concentration in
the filtered water is less than 2.0 mg/l. Enhanced coagulation will require that the
system must remove a yet undetermined amount of organies in the coagulation
serving fewer than 1,000 people will not be required to meet
this proposed rule until 1999.
Groundwater Disinfection Rule
The proposed Groundwater Disinfection Rule (GWDR) requires that water
suppliers using groundwater as a source must provide disinfection. It is expected
to require continuous chlorine residual monitoring for systems that provide service
for a population of 3,300 or more, Systems can obtain a waiver to this rule if
certain criteria are met, such as meeting one or more of the natural disinfection
criteria and all of the other prequalifying conditions. Most public water systems
provide disinfection to water before distribution, but many of the private water
systems will be affected by this rule unless they qualify for the waiver previously
mentioned. The conditions for receiving a waiver are contained in the
Groundwater Disinfection Rule Amendment to the Safe Drinking Water Act of
1996.
Arsenic Rule
The Safe Drinking Water Act of 1996 has required that a proposed Arsenic Rule
be established by January, 2000, and a final rule be in effect by January 2001. The
tule is proposed to place limitations on the amount of arsenic in the water supply.
However, the cost for treating low concentrations of arsenic is high and the
overall health effects are not completely known. Monitoring is required and will
occur once per year for surface waters and once every three years for
groundwater.
Filter Backwash Recycling Rule
The purpose of the Filter Backwash Recycling Rule is to prevent the return of
heavily concentrated contaminants removed by filters into a water system. This
rule may be a part of the Enhanced Surface Water Treatment Rule (ESWTR).
Sulfate Rule
The purpose of the proposed Sulfate Rule is to regulate the amount of sulfate in
public water systems. This rule was proposed in December, 1994, Prior to
’ing a final Rule, research on the health effects of sulfate must be conducted,
This research is expected to be completed by January, 1999,
Virginia Coalfields Regional Water Study Methodology
November 1998,
Page 5 of 5
Virginia Coalfields Regional Water Study Funding
November 1998 Page 1 of 6
FUNDING
General
To construct public utilities for any of the projects outlined in this study, significant financial
assistance will be required. Financial assistance, in the form of grants and low interest loans, is
available from agencies of both the Federal and State Governments. Frequently, it is a problem
attempting to finance a single large project by relying on these traditional funding sources, as state
and federal budgets fix the total amount of money available during the fiscal year to be spent
funding water projects in the state. Significant delays in project implementation are to be
expected if all project money must come from the traditional sources of funds. Therefore, a
discussion of some non-traditional, as well as the traditional sources of funding have also been
included.
A description follows of the traditional sources of funding normally used in funding large
waterworks projects:
Traditional Funding Sources
U.S. Department of Housing and Urban Development/Virginia Department of Housing
and Community Development
The U.S. Department of Housing and Urban Development (HUD) sponsors a block grant
program through the Virginia Department of Housing and Community Development
(VDHCD), which provides grants for projects that include water and sewer service
extensions. The Community Development Block Grant (CDBG) applications are due in
March each year. Any eligible community may apply for the full grant amount of
$700,000 per year per project. Communities may apply for up to two grants, provided
each grant is for a separate project. However, the combined total for the two grants
cannot exceed $1,000,000. Regional projects that serve two or more separate
communities can be funded at $700,000 per community up to a maximum of $2,100,000.
A community’s chances of receiving funding from CDBG are improved if leverage funds
are available. Leverage funds are any monies that have already been acquired for the
project or are likely to be acquired for the project. Therefore, any federal, state, or local
monies that are not already committed to another project can be used as leverage funds.
CDBG funds must be used within two years after being awarded and the community is not
eligible to apply for a new grant until any existing CDBG funded projects are 75 percent
complete. Most of the benefits of CDBG funds are intended to go to Low and Moderate
Income (LMI) households. A community must have at least 51 percent of the users within
the project area to qualify as LMI’s to be eligible for funding from this program.
However, to be competitive, at least 60 percent of potential customers must meet LMI
criteria.
FUNDING
General
To construct publie utilities for any of the projects outlined in this study, significant financial
assistance will be required, Financial assistance, in the form of grants and low interest loans, is
available from agencies of both the Federal and State Governments. Frequently, itis a problem
attempting to finance a single large project by relying on these traditional funding sources, as state
and federal budgets fix the total amount of money available during the fiscal year to be spent
funding water projects in the state. Significant delays in project implementation are to be
expected if all project money must come from the traditional sources of funds. Therefore, a
discussion of some non-traditional, as well as the traditional sources of funding have also been
included,
A description follows of the traditional sources of funding normally used in funding large
waterworks projects:
Traditional Funding Sources
U.S. Department of Housing and Urban Development/ Virginia Department of Housing
and Community Development
The U.S. Department of Housing and Urban Development (HUD) sponsors a block grant
program through the Virginia Department of Housing and Community Development
(VDHCD), which provides grants for projects that include water and sewer service
extensions, The Community Development Block Grant (CDBG) applications are due in
March each year. Any eligible community may apply for the full grant amount of
$700,000 per year per project. Communities may apply for up to two grants, provided
cach grant is for a separate project. However, the combined total for the two grants,
cannot exceed $1,000,000, Regional projects that serve two or more separate
communities can be funded at $700,000 per community up to a maximum of $2,100,000.
A.community’s chances of receiving funding from CDBG are improved if leverage funds
are available. Leverage funds are any monies that have already been acquired for the
project or are likely to be acquired for the project. Therefore, any federal, state, or local
monies that are not already committed to another project can be used as leverage funds.
CDBG funds must be used within two years after being awarded and the community is not
eligible to apply for a new grant until any existing CDBG funded projects are 75 percent
complete, Most of the benefits of CDBG funds are intended to go to Low and Moderate
Income (LMI) households. A community must have at least 51 percent of the users within
the project area to qualify as LMI’s to be eligible for funding from this program,
However, to be competitive, at least 60 percent of potential customers must meet LMI
criteria
Virginia Coalfields Regional Water Study Funding
November 1998, Page 1 of 6
Virginia Coalfields Regional Water Study Funding
November 1998 Page 2 of 6
Rural Development
Rural Development (RD) sponsors a program to help fund the design and construction of
rural water and sewer systems. If a community qualifies as financially needy, it may
receive up to 75 percent of the eligible project cost as grant with the remaining 25 percent
in the form of a low interest loan. A pre-application is required to arrange for Rural
Development financing followed by a final application if funding is approved. Rural
Development loans are secured by either General Obligation or Revenue bonds for
municipalities. Rural Development loans to public utility companies and authorities that
do not have taxing authority are backed by Revenue bonds. Pre-applications may be
submitted at any time during the year.
Appalachian Regional Commission (ARC)
ARC administers a grant program that provides funds up to $500,000. The main focus of
this program is to fund projects that will create or retain jobs. However, designated
Distressed Counties can apply for ARC funds for projects that are not job related. Those
counties in the Coalfields Region are Buchanan, Dickenson, Lee, Russell, and Wise.
Projects must meet the criteria established by ARC to be eligible for this funding. The
ARC funds are usually tied into and administered by other funding sources, such as Rural
Development
Abandoned Mine Land (AML)
In 1990, Congress amended the Surface Mining Control and Reclamation Act (SMCRA)
to allow funding for water projects involving protection, repair, replacement, construction,
or enhancement of facilities relating to water treatment, supply, or distribution in AML
affected areas.
A complete description of the funding policies and procedures is contained in the “AML
Water Project Review Manual” which is available through the Commonwealth of Virginia
Department of Mines, Minerals and Energy. The maximum funding available for each
project is set at $750,000. All funding is in the form of a grant. A community may have
only one AML grant at a time, however, once 75 percent of the funds for a project are
expended, the community is again eligible to apply for new project funding.
Virginia Water Supply Revolving Loan Fund
The 1997 Virginia General Assembly enacted legislation creating the Virginia Water
Supply Revolving Loan Fund. The annual appropriation to this fund is almost $30 million.
Loans from this fund may only be used to alleviate problems related to drinking water
with priority given to those supplies which pose a serious health risk. Interest rates for
these loans range from 0 to 3.0 percent. Communities can qualify as “distressed” by
meeting certain specified criteria. Distressed communities can qualify for low or “no”
interest loans and thirty percent of the annual funding is set aside for “loan subsidies”.
These loan subsidies can include “forgiveness of principal” if certain criteria can be met.
Distressed communities can also qualify for loans with up to 30 year terms. Eligibility is
determined by the Virginia Department of Health and the loans are administered by the
Virginia Resources Authority.
Rural Development
Rural Development (RD) sponsors a program to help fund the design and construction of
rural water and sewer systems, If a community qualifies as financially needy, it may
receive up to 75 percent of the eligible project cost as grant with the remaining 25 percent
the form of a low interest loan. A pre-application is required to arrange for Rural
Development financing followed by a final application if funding is approved, Rural
Development loans are secured by either General Obligation or Revenue bonds for
municipalities. Rural Development loans to public utility companies and authorities that
do not have taxing authority are backed by Revenue bonds. Pre-applications may be
submitted at any time during the year.
Appalachian Regional Commission (ARC)
ARC administers a grant program that provides funds up to $500,000. The main focus of
this program is to fund projects that will create or retain jobs. However, designated
Distressed Counties can apply for ARC funds for projects that are not job related. Those
counties in the Coalfields Region are Buchanan, Dickenson, Lee, Russell, and
Projects must meet the criteria established by ARC to be eligible for this funding. The
ARC funds are usually tied into and administered by other funding sources, such as Rural
Development
Abandoned Mine Land (AML)
In 1990, Congress amended the Surface Mining Control and Reclamation Act (SMCRA)
to allow funding for water projects involving protection, repair, replacement, construction,
or enhancement of facilities relating to water treatment, supply, or distribution in AML.
affected areas,
A complete description of the funding policies and procedures is contained in the “AML.
‘Water Project Review Manual” which is available through the Commonwealth of Virginia
Department of Mines, Minerals and Energy. The maximum funding available for each
project is set at $750,000. All funding is in the form of a grant. A community may have
only one AML grant at a time, however, once 75 percent of the funds for a project are
expended, the community is again eligible to apply for new project funding.
Virginia Water Supply Revolving Loan Fund
The 1997 Virginia General Assembly enacted legislation creating the Virginia Water
Supply Revolving Loan Fund, The annual appropriation to this fund is almost $30 million,
Loans from this fund may only be used to alleviate problems related to drinking water
with priority given to those supplies which pose a serious health risk. Interest rates for
these loans range from 0 to 3.0 percent. Communities can qualify as “distressed” by
meeting certain specified criteria, Distressed communities can qualify for low or “no
interest loans and thirty percent of the annual funding is set aside for “loan subsidies”.
These loan subsidies can include “forgiveness of principal” if certain criteria can be met.
Distressed communities can also qualify for loans with up to 30 year terms. Eligibility is
determined by the Virginia Department of Health and the loans are administered by the
Virginia Resources Authority.
Virginia Coalfields Regional Water Study Funding,
November 1998 Page2 of 6
Virginia Coalfields Regional Water Study Funding
November 1998 Page 3 of 6
Coalfield Water Development Fund, Inc. (CWDF)
The CWDF is a non-profit 501(c)(3) charitable organization providing grant assistance for
water system construction in the counties of Lee, Scott, Wise, Dickenson, Russell,
Tazewell, Buchanan, and the City of Norton. The initial funding for the CDWF
endowment was provided through a federal grant and will be supplemented with private
contributions. The endowment income will be used to make construction grants in the
coal-producing counties of Southwest Virginia.
The CWDF will be known as a “gap financing” fund. Applications must leverage the
maximum funding from traditional financing sources and only utilize grants from the
CWDF to fill the gaps in funding needed for project construction. Projects which can be
funded totally utilizing other federal programs will not be considered as CWDF projects.
In 1998, approximately $30,000 is available for all projects. As the program grows, as
much as $300,000 to $500,000 may be available annually. Applicants can be local
government, public service authority, or non-profit organization. These funds can be used
for essentially any portion of the project cost. The program rating criteria and their
respective relative weights in descending order of importance are:
1. Need for funding to complete project
2. Level of commitment
3. Public health and safety
4. Regional water development advanced/additional projects accelerated
5. Job creation encouraged/maintained
6. Application data provided
Virginia Resources Authority (VRA)
This source of funds may only be used for water, sewer, and drainage projects. VRA
issues bonds in the national market and lends the proceeds to political subdivisions of the
state. The bonds may be either General Obligation or Revenue backed dependant upon
whether or not the borrower has the authority to levee taxes. By using the “moral
obligation” of the State, VRA can offer favorable interest rates to the small borrower on
Revenue bonds.
VRA may issue up to $300 million in revenue bonds to localities for improvements to
water and/or wastewater facilities. The bonds may be either short or long term, fixed or
variable rate debt with each financing structured on current market conditions and investor
preference. In general, due to State backing, the VRA can obtain more attractive rates
than most local governments. Localities must demonstrate the ability to repay the bonds.
Coalfield Water Development Fund, Inc. (CWDF)
‘The CWDF is a non-profit 501(¢)(3) charitable organization providing grant assistance for
water system construction in the counties of Lee, Scott, Wise, Dickenson, Russell,
Tazewell, Buchanan, and the City of Norton. The initial funding for the CDWF
endowment was provided through a federal grant and will be supplemented with private
contributions. The endowment income will be used to make construction grants in the
coal-producing counties of Southwest Virginia.
‘The CWDF will be known as a “gap financing” fund. Applications must leverage the
maximum funding from traditional financing sources and only utilize grants from the
CWDF to fill the gaps in funding needed for project construction. Projects which can be
funded totally utilizing other federal programs will not be considered as CWDF projects.
In 1998, approximately $30,000 is available for all projects. As the program grows, as,
much as $300,000 to $500,000 may be available annually. Applicants can be local
government, public service authority, or non-profit organization. These funds can be used
for essentially any portion of the project cost. The program rating criteria and their
respective relative weights in descending order of importance are:
1
2.
3
4.
5
6.
Need for funding to complete project
Level of commitment
Public health and safety
Regional water development advanced/additional projects accelerated
Job creation encouraged/maintained
Application data provided
rginia Resources Authority (VRA)
This source of funds may only be used for water, sewer, and drainage projects. VRA
issues bonds in the national market and lends the proceeds to political subdivisions of the
state. The bonds may be either General Obligation or Revenue backed dependant upon
whether or not the borrower has the authority to levee taxes. By using the “moral
obligation” of the State, VRA can offer favorable interest rates to the small borrower on
Revenue bonds.
VRA may issue up to $300 million in revenue bonds to localities for improvements to
water and/or wastewater faci The bonds may be either short or long term, fixed or
variable rate debt with cach financing structured on current market conditions and investor
preference. In general, due to State backing, the VRA can obtain more attractive rates
than most local governments. Localities must demonstrate the ability to repay the bonds.
Virginia Coalfields Regional Water Study Funding
November 1998, Page 3 of 6
Virginia Coalfields Regional Water Study Funding
November 1998 Page 4 of 6
Economic Development Administration (EDA)
This program is tied closely with unemployment and overall economic development.
Projects are ranked based on their potential for creating new jobs, saving existing jobs,
and stimulating new economic development within the project area. New projects to be
funded by this source must have firm industrial committments prior to grant award.
Grants from EDA range from 50 to 60 percent of total project cost. A grant from
$500,000 to $750,000 per project is thought to be the typical maximum funding allowed.
To obtain this funding, projects must be ranked high in the Overall Economic
Development Program (OEDP) of their respective Planning District Commissions.
Southeast Rural Community Assistance Project, Inc.
The Southeast Rural Community Assistance Project, Inc.(formerly Virginia Water Project,
Inc.) operates grant and loan programs for low income rural communities. The grant
program provides limited funds for development of water facilities to low income rural
residents. These grants will provide up to $400 each for connection fees to eligible low
income households. Depending upon the income level of the community, grant funds are
sometimes available for preparation of detailed preliminary engineering reports for water
and/or sewer systems. The loan program provides up to $100,000 per project with
interest rates ranging from 3 to 7 percent, with terms of up to 20 years.
Non-traditional Funding Options
As discussed in the previous paragraphs, there are numerous funding sources available that
provide both grants and/or low interest loans for water projects. Due to the high costs of many of
the proposed projects presented in this study, funding provided by traditional sources may not be
adequate to reduce user costs to an affordable level.
Private Bond Sales
The Private Bond Market has become a legitimate alternative for the funding of the projects
contemplated in this report for several reasons: First, interest rates on bonds continue to drop to
near record levels. Second, discount rates continue to fall as more underwriters enter this new
competitive market. Many of Virginia’s finest investment banking firms now provide avenues for
nonrated localities to access the market for selling bonds. Third, the concept of combining system
resources to create regional authorities with a larger customer base makes the sale of revenue
bonds on the private market a viable alternative. Finally, the process required for selling bonds on
the private market requires very little red tape as compared to many of the traditional funding
options with fewer restrictions on where the proceeds are spent. Therefore, it is strongly
recommended that this option be evaluated for the projects under consideration. The services of a
bond underwriting firm/financial advisor would need to be procured in order to proceed.
Economic Development Administration (EDA)
This program is tied closely with unemployment and overall economic development,
Projects are ranked based on their potential for creating new jobs, saving existing jobs,
and stimulating new economic development within the project area, New projects to be
funded by this source must have firm industrial committments prior to grant award,
Grants from EDA range from 50 to 60 percent of total project cost. A grant from
$500,000 to $750,000 per project is thought to be the typical maximum funding allowed.
To obtain this funding, projects must be ranked high in the Overall Economic
Development Program (OEDP) of their respective Planning District Commissions.
Southeast Rural Community Assistance Project, In«
The Southeast Rural Community Assistance Project, Inc.(formerly Virginia Water Project,
Inc.) operates grant and loan programs for low income rural communities. The grant
program provides limited funds for development of water facilities to low income rural
residents. These grants will provide up to $400 each for connection fees to eligible low
income households. Depending upon the income level of the community, grant funds are
sometimes available for preparation of detailed preliminary engineering reports for water
and/or sewer systems. The loan program provides up to $100,000 per project with
interest rates ranging from 3 to 7 percent, with terms of up to 20 years.
Non-traditional Funding Options
As discussed in the previous paragraphs, there are numerous funding sources available that
provide both grants and/or low interest loans for water projects. Due to the high costs of many of
the proposed projects presented in this study, funding provided by traditional sources may not be
adequate to reduce user costs to an affordable level.
Private Bond Sales
The Private Bond Market has become a legitimate alternative for the funding of the projects
contemplated in this report for several reasons: First, interest rates on bonds continue to drop to
near record levels. Second, discount rates continue to fall as more underwriters enter this new
competitive market. Many of Virginia’ finest investment banking firms now provide avenues for
nonrated localities to access the market for selling bonds. Third, the concept of combining system
resources to create regional authorities with a larger customer base makes the sale of revenue
bonds on the private market a viable alternative, Finally, the process required for selling bonds on
the private market requires very little red tape as compared to many of the traditional funding
options with fewer restrictions on where the proceeds are spent, Therefore, it is strongly
recommended that this option be evaluated for the projects under consideration. The services of a
bond underwriting firm/financial advisor would need to be procured in order to proceed
Virginia Coalfields Regional Water Study Funding
November 1998, Page 4 of 6
Virginia Coalfields Regional Water Study Funding
November 1998 Page 5 of 6
Design-build-finance (Operate):
There are many private utility companies who specialize in potable water supply and delivery in
Virginia. One such company, the Bluefield Valley Water Works Company (BVWWC), has
successfully operated systems in the eastern region of Tazewell County for several years.
BVWWC is a subsidiary of a nationally known and publicly held potable water company known
as the American Water Company (AWC). The AWC also owns and operates systems in southern
West Virginia and sells water to Bland County, its supply to the Rocky Gap and Bastian, Virginia
systems along I-77. AWC also owns the water system for the city of Petersburg, Virginia. The
possibility of offering a franchise to a finance, design, build, and operate company could bridge the
resource gap so often realized in this region.
Privatization
We have discussed some of the benefits of privatizing public systems in the implementation
section of this report from an operating perspective. However, the financing possibilities of this
option are no less intriguing. Many of the local government systems in southwest Virginia were
paid for with substantial grants in the 1960's and 1970's when large scale grants were funded on a
regular basis. Moreover, many of our localities, if not all, were eligible for low interest on
subsided loans offered by the state and federal government programs. Many of these loans have
been or are nearing retirement. The result of this is a large amount of equity built-up in these
systems with solid customer base in place.
Privatization offers the possibility through franchising the operations and customer base on
outright sale of systems to recover this equity. Proceeds from equity could then be leveraged by
other state and/or federal government programs to fund the strategic links envisioned by this
study. In effect, a revolving grant/loan fund is created by recovering the equity built-up in these
systems and reusing these dollars to expand the customer base. This result is a greater economy of
sale for rate making a more efficiently operated system.
Special Legislation
For the past 30 years, a considerable effort has been made to fully develop and extend water
service throughout the Coalfields region of Virginia. Because specific financing sources are geared
to specific issues, i.e. Economic Development Administration for economic development
activities, Community Development Block Grant for assistance to low and moderate income
persons, Appalachian Regional Commission also for economic development, the upper limits of
serving additional households and linking systems with a comprehensive system has been reached
using these resources alone.
The gaps between systems that now exist will not immediately generate sufficient revenue without
some type of unconventional financing. None of the existing sources available would address these
particular needs. The Commonwealth of Virginia could make a compelling argument for an
investment for state general fund dollars to assist in these strategic linkages, primarily transmission
lines.
Design-build-finance (Operate)
There are many private utility companies who specialize in potable water supply and delivery in
Virginia, One such company, the Bluefield Valley Water Works Company (BVWWC), has
successfully operated systems in the eastern region of Tazewell County for several years.
BVWWC is a subsidiary ofa nationally known and publicly held potable water company known,
as the American Water Company (AWC). The AWC also owns and operates systems in southern
‘West Virginia and sells water to Bland County, its supply to the Rocky Gap and Bastian, Virginia
systems along I-77. AWC also owns the water system for the city of Petersburg, Virginia, The
possibility of offering a franchise to a finance, design, build, and operate company could bridge the
resource gap so often realized in this region,
Pr
jon
We have discussed some of the benefits of privatizing public systems in the implementation
section of this report from an operating perspective. However, the financing possibilities of this,
option are no less intriguing. Many of the local government systems in southwest Virginia were
paid for with substantial grants in the 1960's and 1970's when large scale grants were funded on a
regular basis. Moreover, many of our localities, if not all, were eligible for low interest on
subsided loans offered by the state and federal government programs. Many of these loans have
been or are nearing retirement. The result of this is a large amount of equity built-up in these
systems with solid customer base in place.
Privatization offers the possibility through franchising the operations and customer base on
outright sale of systems to recover this equity. Proceeds from equity could then be leveraged by
other state and/or federal government programs to fund the strategic links envisioned by this
study. In effect, a revolving grantloan fund is created by recovering the equity built-up in these
systems and reusing these dollars to expand the customer base. This result is a greater economy of
sale for rate making a more efficiently operated system.
Special Legislation
For the past 30 years, a considerable effort has been made to fully develop and extend water
service throughout the Coalfields region of Virginia. Because specific financing sources are geared
to specific issues, ie. Economic Development Administration for economic development
activities, Community Development Block Grant for assistance to low and moderate income
persons, Appalachian Regional Commission also for economic development, the upper limits of
serving additional households and linking systems with a comprehensive system has been reached
using these resources alone,
The gaps between systems that now exist will not immediately generate sufficient revenue without
some type of unconventional financing. None of the existing sources available would address these
particular needs. The Commonwealth of Virginia could make a compelling argument for an
investment for state general fund dollars to assist in these strategic linkages, primarily transmission
lines.
Virginia Coalfields Regional Water Study Funding
November 1998, Page 5 of 6
Virginia Coalfields Regional Water Study Funding
November 1998 Page 6 of 6
This would obviously require appropriations by the Virginia General Assembly, hopefully with the
support of the Governor, and could not be done in any single year biennium. It is an initiative
which could be pursued as a recommendation of the Joint Subcommittee studying drinking water
supply problems and funding mechanisms to correct drinking water deficiencies in southwestern
Virginia (HJR 104), and by extension, the Virginia General Assembly as something to be
considered.
A more effective and financially creative way to generate these construction dollars would be the
issuance of bonds by the Virginia Resource Authority (or some similar organization authorized to
issue bonds). Debt service for the bonds would be funds appropriated by the General Assembly.
The bond proceeds would thus appear as a grant to construct these key regional linkages.
In the short term, the General Assembly might consider a one-time appropriation to finance actual
preliminary engineering reports (for Health Department approval), environmental assessments,
intermunicipal agreements, and other required technical work. This would accelerate these
regional projects from a conceptual planning stage to readiness for construction. As with this
particular study, the two PDCs would be the fiscal agents to receive and disburse these funds. A
budget request of $ 500,000 is hereby recommended.
This would obviously require appropriations by the Virginia General Assembly, hopefully with the
support of the Governor, and could not be done in any single year biennium. It is an initiative
which could be pursued as a recommendation of the Joint Subcommittee studying drinking water
supply problems and funding mechanisms to correct drinking water deficiencies in southwestern
Virginia (HR 104), and by extension, the Virginia General Assembly as something to be
considered.
A more effective and financially creative way to generate these construction dollars would be the
issuance of bonds by the Virginia Resource Authority (or some similar organization authorized to
issue bonds). Debt service for the bonds would be funds appropriated by the General Assembly.
The bond proceeds would thus appear as a grant to construct these key regional linkages.
In the short term, the General Assembly might consider a one-time appropriation to finance actual
preliminary engineering reports (for Health Department approval), environmental assessments,
intermunicipal agreements, and other required technical work. This would accelerate these
regional projects from a conceptual planning stage to readiness for construction. As with this
particular study, the two PDCs would be the fiscal agents to receive and disburse these funds. A
budget request of $ 500,000 is hereby recommended.
Virginia Coalfields Regional Water Study Funding,
November 1998 Page 6 of 6
Virginia Coalfields Regional Water Study Implementation
November 1998 Page 1 of 2
IMPLEMENTATION
General
One of the vital issues to the success of a regional water supply system is implementation. Two
major questions must be answered before the project can progress: 1) What organization will own
and operate the system after it is installed?, and 2) How will the users pay for their share of the
project? These questions must be resolved early in the planning stages of the project if it is to
succeed. For most of the projects described in this report, there are several ways that
implementation may be handled. A brief description of the optional implementation methods
follows:
Regional Authority
One option which should be considered for each of the projects described in this study is the
Regional Authority. Such a Regional Authority could be established which could cross any
political boundary such as public service authority, county, town, city, or planning district. In this
option, each of the owners of existing water systems would give up their systems to form a
regional authority which would own and operate all of the existing and new facilities and serve all
the customers within the service area. Each of the original system owners would have a seat on
the new authority. Each newly served area would also have representation on the authority.
Several advantages would arise from such a plan. Each of the individual existing system owners
would be able to get out of the water supply business and allow the authority to deal with the
issues that arise. The authority would assume the debts of each of the existing owners. Rates
could be set uniformly across the service area. An economy of scale would be realized by
allowing one operations and maintenance staff to serve the entire area rather than duplicating staff
in each of the individual areas.
There are several disadvantages of the regional authority. The individual water owner will no
longer have exclusive control of the water system. Rates will be set by the authority rather than
by the individual system owner.
Intermunicipal Agreements
Another option for implementation of a regional transmission and distribution system would entail
the negotiation of contracts between the owners of individual existing systems to facilitate
interconnections. In this option, the owners of existing systems would retain ownership of their
water systems and agree to sell and/or buy water from their neighbors in order to regionalize
water service in the area. One of the individual authorities, such as a public service authority or a
town, would be the lead agency. It is necessary for one agency to take the lead in order to
facilitate the financing of the project and the installation of the new capital improvements.
IMPLEMENTATION
General
One of the vital issues to the suecess of a regional water supply system is implementation, Two
major questions must be answered before the project can progress: 1) What organization will own
and operate the system after itis installed? and 2) How will the users pay for their share of the
project? These questions must be resolved early in the planning stages of the project to
succeed. For most of the projects described in this report, there are several ways that
implementation may be handled. A brief description of the optional implementation methods
follows:
Regional Authority
One option which should be considered for each of the projects described in this study is the
Regional Authority. Such a Regional Authority could be established which could cross any
political boundary such as public service authority, county, town, city, or planning district. In this
option, each of the owners of existing water systems would give up their systems to form a
regional authority which would own and operate all of the existing and new facilities and serve all
the customers within the service area, Each of the original system owners would have a seat on
the new authority. Each newly served area would also have representation on the authority.
Several advantages would arise from such a plan, Each of the individual existing system owners
would be able to get out of the water supply business and allow the authority to deal with the
issues that arise. The authority would assume the debts of each of the existing owners, Rates
could be set uniformly across the service area. An economy of scale would be realized by
allowing one operations and maintenance staff to serve the entire area rather than duplicating staff
in each of the individual areas.
There are several disadvantages of the regional authority. The individual water owner will no
longer have exclusive control of the water system. Rates will be set by the authority rather than
by the individual system owner.
Intermunicipal Agreements
Another option for implementation of a regional transmission and distribution syst
the negotiation of contracts between the owners of individual existing systems to facilitate
interconnections. In this option, the owners of existing ip of their
water systems and agree to sell and/or buy water from their neighbors in order to regionalize
water service in the area. One of the individual authorities, such as a public service authority or a
town, would be the lead agency. It is necessary for one agency to take the lead in order to
facilitate the financing of the project and the installation of the new capital improvements.
Virginia Coalfields Regional Water Study Implementation
November 1998, Page 1 of 2
Virginia Coalfields Regional Water Study Implementation
November 1998 Page 2 of 2
Advantages to the individual water owners would include retaining control of their waterworks,
retaining the ability to establish (or negotiate) rates, and the ability to maintain their existing staffs.
Several disadvantages can be found in using intermunicipal agreements, however. Financing will
be easier for large regional authorities to obtain than for individual water system owners. Some
difficulties may be encountered in working across political subdivisions in this manner. Multiple
operations staffs will be required in this mode, which will not realize the benefits of a larger
economy of scale.
Privitization
Another potential alternative for regionalizing systems could entail the involvement of private
utility operating companies and their capital. There is a trend across the country toward “cashing
in” on the equity and customer buildup in public utilities. This trend is being driven by ever
increasing regulatory requirements that place operating burdens beyond the ability and resources
of many local governmental bodies. There is also a desire on the part of elected officials to
leverage their public dollars to the greatest extent possible. Equity and customer bases are more
attractive today on the open market than ever. This creates the possibility of private/public
partnerships on large scale regional systems such as those contemplated in this report.
Placing selective systems (or their customers) for sale to private entities could generate additional
capital for matching grants and loans from public services to fund strategic links between
individual systems.
There are advantages to this alternative of implementation. If a private company owns and
operates a public utility such as a water distribution system, the user rates must be approved by
the State Corporation Commission. This would ensure a fair process in rate setting. Also, each
individual owner may not be maintaining their own system. It may also be possible for a private
company to raise capital for water system extensions, making system expansions easier. A private
owner of a larger system could also enjoy the economy of scale in operation of the system with
resulting rates being lower than that possible for individually operated systems.
Advantages to the individual water owners would include retaining control of their waterworks,
retaining the ability to establish (or negotiate) rates, and the ability to maintain their existing staffs.
Several disadvantages can be found in using intermunicipal agreements, however. Financing will
be easier for large regional authorities to obtain than for individual water system owners. Some
<ifficulties may be encountered in working across political subdivisions in this manner. Multiple
operations staffs will be required in this mode, which will not realize the benefits of a larger
economy of scale.
Py
tization
Another potential altemative for regionalizing systems could entail the involvement of private
utility operating companies and their capital. There is a trend across the country toward “cashing
in” on the equity and customer buildup in public utilities. This trend is being driven by ever
increasing regulatory requirements that place operating burdens beyond the ability and resources
of many local governmental bodies. There is also a desire on the part of elected officials to
leverage their public dollars to the greatest extent possible. Equity and customer bases are more
attractive today on the open market than ever. This creates the possibility of private/public
partnerships on large scale regional systems such as those contemplated in this report.
Placing selective systems (or their customers) for sale to private entities could generate additional
capital for matching grants and loans from public services to fund strategic links between
individual systems.
There are advantages to this alternative of implementation, If a private company owns and
operates a public utility such as a water distribution system, the user rates must be approved by
the State Corporation Commission, This would ensure a fair process in rate setting. Also, each
individual owner may not be maintaining their own system. It may also be possible for a private
company to raise capital for water system extensions, making system expansions easier. A private
owner of a larger system could also enjoy the economy of scale in operation of the system with
resulting rates being lower than that possible for individually operated systems.
Virginia Coalfields Regional Water Study Implementation
November 1998, Page 2 of 2
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