Saluda moves to buy Tuxedo water system

Published 1:40 pm Friday, July 18, 2008

City engineer Jonathan Hollifield of Watermark Engineering told the Saluda commissioners Monday that he believes the Tuxedo wells can produce between 300 and 400 gallons per minute, or a half million gallons per day, five times as much water as the entire City of Saluda uses.

After a closed session discussion, the commissioners announced the appointment of engineer Hollifield, city attorney Bailey Nager and commissioner John Morgan to begin negotiations with the owners of the private Tuxedo Water System.

In open discussions earlier in the meeting, commissioners heard Hollifield&squo;s assessment that the city could likely purchase the Tuxedo Water System, make necessary upgrades and repairs, and operate the system profitably as is.

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&dquo;It is a tremendous water source,&dquo; Hollifield said, &dquo;and it is financially self-sustaining.&dquo;

City finance officer Ron Cole estimated that if the City of Saluda paid between $150,000 and $200,000 for the system and spent about $25,000 on upgrades, the current operating revenues would produce a small profit after operating costs and debt service.

City administrator Erny Williams said city officials expect that the Tuxedo area, located near Lake Summit, will grow. He noted that there is no public water available now from Tuxedo to the South Carolina state line.

Ultimately, Williams said the city would like to have the Tuxedo wells as a second source of water for the City of Saluda. Hollifield estimated that the cost of producing 1,000 gallons of raw water from Tuxedo at $1, less than half the $2.30 per 1,000 gallons the city is paying to the City of Hendersonville for its water now.

But Williams said the city has not yet &dquo;run the numbers&dquo; on what it would cost to bring Tuxedo water on line in the city. He said commissioners wanted to evaluate the purchase of the Tuxedo Water System as a stand alone operation.

Nonetheless, at least one commissioner was excited about the future possibilities.

&dquo;We&squo;ve been looking for a second source of water for years,&dquo; commissioner Laura Fields said, expressing her excitement. &dquo;Now we&squo;re looking at something that is already a positive cash flow!&dquo;

Cole said the Tuxedo Water System has a book value of $103,596 and that indications were that Tuxedo&squo;s owners felt a fair offer would be two times the book value.