Despite reservations, the Wilkes County commissioners approved a new agreement with the U.S. Army Corps of Engineers detailing financial obligations of the county and Winston-Salem with W. Kerr Scott Dam and Reservoir Tuesday night.
Their concerns focused on the lack of limits on costs the county could incur.
County Attorney Tony Triplett said Winston-Salem already approved the same three-page “supplemental agreement,” which replaces a 1960 contract and 1970 addendum that expire in August 2020.
These documents resulted from Wilkes County and Winston-Salem paying about $500,000 apiece toward the $7.8 million cost of building W. Kerr Scott Dam on the Yadkin River in the early 1960s. The county’s last payment on the debt, $34,686, is this year.
In return for their funding, Wilkes County received rights to one-half and Winston-Salem received rights to the other half of the 33,000 acre-feet of water stored between 1,000 and 1,030 feet above sea level in the reservoir. The reservoir’s normal surface water level is 1,030 feet.
These rights mean both Winston-Salem and Wilkes County can request release of water from this portion of the reservoir for raw water intakes downstream on the Yadkin, said County Attorney Tony Triplett. A raw water intake planned for many years on the reservoir to supply the Wilkesboro and North Wilkesboro water systems, formally dropped in early 2019 due to costs, was to utilize this portion.
The new agreement has no termination provision, but Triplett said the county or Winston-Salem could exit it by no longer making “repair, rehabilitation and replacement” (R, R & R) payments and/or operation and maintenance (O & M) payments for upkeep of W. Kerr Scott Dam and Reservoir. Ceasing payments would result in default and losing water storage rights.
Triplett said there also are provisions allowing the Corps to stop overseeing W. Kerr Scott Dam and Reservoir and turn it over to the county and/or Winston-Salem if certain conditions are met, including absolving the Corps of any liability.
He said he can’t imagine the county or Winston-Salem defaulting on their financial obligations or the Corps walking away from the project so the supplemental agreement will likely be in effect for generations to come. “It’s a big deal that the board is addressing tonight.”
Triplett said county, Winston-Salem and Corps officials have worked for several years to determine how or whether to continue the contract.
The Corps “is in driver’s seat on this and Winston-Salem and the county have had to more or less concur” with the supplemental agreement presented by the Corps and used as a template at Corps reservoirs nationwide, he added.
“They didn’t prohibit us from offering changes but they strongly discouraged it, so I feel like the supplemental agreement before you is probably the best we’re going to do. I think it does protect the county’s interests.”
Triplett said it includes two new provisions—R, R & R costs and “sedimentation surveys.”
Triplett said Corps officials told him R, R & R refers to higher level costs associated with infrequent or one-time repairs or replacements, but the addition won’t necessarily result in higher bills for the county and Winston-Salem because there will be overlap between R, R & R and O & M. He said he was told it would sometimes be a matter of determining which one of the two categories an expense is labeled for accounting purposes.
These costs will no doubt continue to rise, but at a fairly stable rate, Triplett said.
Wilkes County and Winston-Salem have each paid half of 17.93% of O & M costs at the reservoir annually under the 1960 contract and this will continue. He said their shares of R, R & R payments will be made on the same basis.
O & M has cost the county alone a little over $130,000 per year in recent years and it peaked at $208,088 in 2012.
The supplemental agreement requires that the Corps district engineer make sedimentation surveys of the reservoir at least every 15 years.
It says a determination of an amount of sediment in the reservoir that could impact any reservoir purpose such as flood control or water supply may result in “an equitable redistribution of the sediment reserve storage space.”
Triplett said Corps officials acknowledged that water supply storage space could be reduced if enough sediments accumulated on the reservoir floor. He said they stated that this has never occurred at a Corps reservoir and there was no indication enough sediments had accumulated to encroach on the 1,000-feet-above-sea-level floor or the water supply storage pool.
Blevins said that according to an engineering study done when the raw water intake for the Wilkesboros was being considered on the reservoir, the volume of water stored there has dropped by several billion gallons since the dam was built due to sediments washed in.
He voiced concern about uncertainty of costs the county could face if the Corps decided to have sediments dredged from the reservoir. Other commissioners indicated concern about the county’s lack of control over other costs.
Triplett said the county has never known what O & M costs might be, but he said a meeting could be set up with the Corps for more information. “In my opinion, further negotiation won’t materially change anything,” he added.
Commissioner Brian Minton said Corps officials are difficult to deal with.
Blevins made a motion to table action to gain more information and allow more consideration since the original contract’s expiration is a year away. Blevins’ motion was defeated 3-2, with Commission Chairman Keith Elmore and commissioners Eddie Settle and Brian Minton voting against it and Blevins and Commissioner David Gambill voting for it.
When Elmore asked if there was a motion to approve the supplemental agreement, a few seconds of silence passed before Blevins said, “This is ridiculous. I’ll go ahead and make a motion to approve it.” This motion passed 4-1, with Gambill voting against it.
As for annual debt payments from the dam’s construction, Winston-Salem paid its share and Wilkes County’s share in 1971-1973. This left the county to pay it all in 2018-2020—a little over $34,000 each of the three years.
The county’s share of annual debt payments with interest have gradually dropped after starting at $11,000 to $12,000 in the 1970s. The most the county has paid in a single year on debt and O & M combined was $226,424 in 2012.
Triplett said the supplemental agreement remains in effect “for the life of the project.” He added, “This, in my opinion, essentially makes the contract permanent, as it seems highly unlikely that the U.S. government would abandon W. Kerr Scott Dam and Reservoir at any point in the remotely foreseeable future.”
The 1960 contract has a term of 50 years, but Triplett said it doesn’t expire until 2020 because the 50-year term didn’t start until 1970 when Winston-Salem and the county first requested the release of water.
The 1960 contract allows for 25-year renewals if Winston-Salem, the county and Corps agree on future payments. “We have long sought a more definitive term so that renewal is not a recurring issue,” said Triplett.
Construction of the dam started in the fall of 1960. The 50th anniversary of its completion was observed in September 2012.