Frankford water system purchase decision requested by Feb. 3

Frankford residents and business owners have had a couple chances during the past week to get a closer look at how a proposed purchase of the Town’s water system would affect them.

Artesian Water Co. submitted a proposal in October to purchase the water system for $3.6 million. The Newark-based company was the only one to submit a proposal in response to the town’s request-for-proposals (RFP).

If Artesian’s proposal is accepted by the Town, representatives said the town’s water rate of 12.68 cents per 1,000 gallons would stay the same for a year. After that, the average bill would decrease, although a few customers — mostly businesses — could see theirs increase slightly.

Council Vice President Greg Welch said at a public meeting regarding the Artesian proposal that if it is not accepted, the Town will face needing to perform major upgrades to its aging water system — which would come with water rate increases.

The Town has struggled to maintain its system in recent years, particularly in the past two years since Mountaire Farms, which contributed 40 percent of the Town’s water revenue, constructed its own water system for its grain facility.

Artesian has asked the town council to respond to its proposal by the council’s Feb. 3 regular meeting.

John Thaeder, Artesian’s vice president for operations, told residents attending the Tuesday, Jan. 21, standing-room-only meeting regarding the proposal, that the company has earmarked $1 million to upgrade the town’s existing water mains.

Thaeder said that if Artesian’s proposal is accepted, the company will examine all the existing mains, paying particular attention to any areas where water-quality issues have been reported. All water meters would be replaced at no cost to customers, he said.

Each connection will be analyzed, as well.

“We’ll be looking at, is everybody connected in the most efficient way possible,” Thaeder said. For example, some customers may have multiple connections when they only need one, he said.

Answering questions about possible rate increases, Artesian’s chief financial officer and treasurer, David Spacht, responded that the company’s rates are set statewide, and that the last rate increase was in 2014. He said the company’s statewide rate and resources “makes us more capable of doing this kind of improvements without affecting individual customers. It’s just a question of economies of scale.”

Artesian has about 83,000 customers in Delaware, Spacht said. Frankford currently has about 350 customers on its water system.

Spacht said after the meeting that Artesian had approached Frankford informally after Mountaire went off the Town’s water system to see if officials were interested in working with the company to overcome the Town’s issues with its water plant. But nothing formal was done until the Town put out its RFP last fall, he said.

“It made a lot of sense” for Artesian to propose purchasing the Frankford system, Spacht said, particularly since the company is constructing a new facility on Armory Road in Dagsboro that would serve its growing service area. That project includes three new wells, a maintenance building and a 1-million-gallon water tower near the intersection of Armory Road (Route 20) and Vines Creek Road (Route 26).

That facility is expected to begin operation in early 2021.

Of the four council members at the Jan. 21 meeting, only Town Council Vice President Greg Welch said he has made up his mind that the Artesian proposal would be the best move for the Town regarding its water system.

“I have not made my mind up,” said Town Council President Joanne Bacon.

Council Member Jimmy Sample said he is “collecting information,” and Council Member Skip Ash said, “I’m sitting on my hands.” Council Member Pam Davis was absent from the Jan. 21 meeting but had attended earlier meetings on the subject.

Frankford’s business community, as well as representatives from the Indian River School District, were invited to a meeting on Jan. 16 with the town council and Artesian officials. At that meeting, Thaeder said small businesses could see an increase in their water rates. He said, however, that Artesian would work with businesses to see where they might be able to reduce their rates.

“We are not looking to take advantage of the situation,” he said.

An additional meeting regarding the Artesian proposal, tentatively scheduled for Wednesday, Jan. 22, was canceled.

 

By Kerin Magill
Staff Reporter