Tega Cay leaders wasted little time Wednesday giving initial approval to a $7.9 million plan not only to purchase Tega Cay Water Service, but to pay down existing utility debt.
“The purchase price is still $5.85 million,” said City Manager Charlie Funderburk, “but (the extra money) is allowing us to refinance the (Tega Cay Utilities Department) bond at a lower rate.”
The city has an agreement in place with Tega Cay Water Service to purchase its system, with closing to come by June 16. Funderburk expects closing by June 13, he said. If closing isn’t complete by June 16, the city would need to pass new or amended ordinances that would further delay the sale.
The city already owns and runs TCUD, serving newer sections of the city. Tega Cay Water Service operates in the oldest homes and neighborhoods in Tega Cay. The roughly $2 million difference between what the city will pay for Tega Cay Water Service and the $7.9 million bond plan will help build reserve funds in addition to paying down existing debt at a lower rate.
TCWS serves 1,700 residents and TCUD has 1,500 customers. There aren’t immediate plans to join TCUD and the new system, which will be called TCUD-II, following the sale, but that could happen eventually, officials have said.
“Both systems will still pay for their respective costs,” Funderburk said.
At its May 19 meeting, City Council approved a $676,045 budget for TCUD-II running May 31 to Sept. 30. A new budget in October will coincide with the city’s fiscal year start. The initial budget won’t raise water rates compared to what Tega Cay Water Service customers pay now. There is a sewage rate increase of $3 per month.
Council needed only half an hour to meet in executive session, then vote on the ordinance allowing for a bond and four other items. It was the latest in several special called meetings as the city works out the utility sale, after months of resident complaint following sewage spills and cost concerns with Tega Cay Water Service.
One more special meeting comes June 5, when Council will take up final reading on the $7.9 million plan.
“Then, hopefully, we’ll be done with the special meetings for a while,” Funderburk said. “We’re getting real close to getting everything finalized.”