Mayor: No rates set yet despite decision made at June 17 meeting
GEORGETOWN — City officials voted unanimously on June 17 to sell up to a half million gallons of water a day to a new Sunrise Coal mine that will be constructed near Homer.
But many details remain to be settled, and some questions are still unanswered.
Mayor Kay Sanders said Friday that she did not know what rate the mine would be charged for water, how much revenue she expected the agreement to generate or what the city would do with the additional revenue to the water fund.
Sanders also did not know what infrastructure improvements would be needed to deliver up that volume of water to the proposed mine that will be built near Homer, a village almost 20 miles from Georgetown.
"All we agreed to do was to supply the water," Sanders said. "The attorneys and engineers are working out the rest of it."
Since 2003, Georgetown has received its drinking water from two wells that were constructed near Cayuga, Ind., about 12 miles to the east of the city in southern Vermilion County. Water is treated at the well facility, and then is pumped to Georgetown.
Sanders was not sure how much water the wells provide currently, but guessed that it was about 300,000 gallons a day.
Sanders said she was approached by representatives of Sunrise Coal of Terre Haute, Ind., in mid-May about supplying production water to the proposed underground mine, which will be built near the intersection of County Roads 800 North and 100 East in Vermilion County.
The village of Homer, in southeastern Champaign County, will supply the mine with up to 20,000 gallons of treated water a day and provide sewer services, but declined to supply the mine with production water to be used for washing the coal and for the mining process.
Sunrise Coal expects to need about 300,000 gallons a day for the first few years while the mine is being developed, and then up to 500,000 gallons a day after that.
At the June 17 meeting, it was decided that Sunrise would pay the city the residential rate for water for the first year, and a rate for the next 29 years would be negotiated within 90 days.
The water rate currently charged to out-of-town customers is $16 for the first 2,000 gallons of water used in a month, and $8.88 for each additional 1,000 gallons of water used that month.
At that rate, Sunrise would pay the city about $2,660 for 300,000 gallons of water.
But Sanders said Friday that instead of using the residential rate for the first year, the city engineer, The Farnsworth Group of Champaign, would come up with a rate to charge the mine.
She did not know how much to expect in revenues for the sale of water to the mine company, and did not have any special water projects in mind that could be funded by the additional revenue.
"How can you make plans until you know how much money you are going to have?" Sanders said.
Also at the June 17 meeting, Suzanne Jaworowski, the communications director for Sunrise Coal, said that the company would pay for about $1 million in infrastructure improvements to the city's water system to get the water to the proposed mine, which will be located about 5 miles from Homer.
Sanders said city engineers have not yet determined whether the existing wells, pumps and water mains could accommodate producing and transporting an additional 500,000 gallons of water a day. Sanders said she assumed they could, but could not swear to it.
So, she is not certain whether the $1 million in infrastructure improvements was the expected cost of the new water main that will have to be run from Georgetown to the new mine, or if it would also cover the costs of any upgrades needed to the current system.
"It is my understanding that the company will foot the bill for all the improvements needed," Sanders said.
She also said that she was assured that Sunrise has a backup system in place — which she assumed was some sort of storage tank — in case a serious drought or fire required the city to temporarily need a greater percentage of water from the wells than normal.
"I will not jeopardize the people of Georgetown," Sanders said.
Sanders said that even though she still has questions, she hopes that they will be answered before the contracts need to be signed. She said that changes to the agreement can still be made, and that "nothing is set in stone yet."
"I think this is a good thing for Georgetown," Sanders said. "This will generate revenue for the city and create jobs in this area."