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dailypress.com

Council OKs $20M reservoir land buy

The city is carrying the financial responsibility for the $289 million King William project.

By SABINE HIRSCHAUER

247-4536

August 13, 2008

NEWPORT NEWS

Against the backdrop of two new studies that rebuff the city's argument that it needs to build the King William reservoir to combat increasing water demand on the Peninsula in the future, the City Council Tuesday night endorsed borrowing $20 million to buy 3,000 acres for the reservoir.

The city will borrow the money for five years at an annual interest rate of 3.66 percent.

With the move, the city is carrying the financial responsibility for King William County, which originally was supposed to buy the 90 or so still needed parcels for the controversial reservoir.

In November, the county's Board of Supervisors voted against the multimillion-dollar borrowing because of the 'uncertainty' of the project.

"We had grave concerns about the project as a whole," said former King William County Supervisor Eugene Rivara. "Please hold off on borrowing the money."

The $289 million King William reservoir, which is scheduled to provide Peninsula customers with water by 2019, attracted a flood of controversy for years mainly from environmental groups that coin the reservoir as an environmental disaster primarily because it would destroy 403 acres of wetlands.

Last week, two studies released by the Alliance to Save the Mattaponi concluded that in the last 15 years the demand for water remained steady and even slightly declined.

According to the city's 1997 environmental impact statement, Peninsula water users would draw 61.2 million gallons per day from the system by 2010. The two new reports show the demand is about 17.7 million gallons per day lower than that estimate.

The two studies were completed by Donald H. Phillips, a retired NASA Langley physicist whose personal study in 1997 accurately projected currently Peninsula water use, and Michael Siegel, a consultant with Public and Environmental Finance Associates in Washington.

"Newport News should look carefully to the scientist, who had it right instead of the scientist, who had it wrong," said Kelly Place, a waterman and longtime opponent of the reservoir.

The money is being financed through selling water revenue bonds, which are backed by money generated by Newport News Waterworks. In the short run, borrowing the money would save the city money since interest payments would be lower than the actual lease payments to the county, city officials said.

It will take about 45 days after Tuesday's meeting to issue the bonds.

In 1990, the King William County agreed to buy the land for the reservoir, and the city would lease the land from the county.

In other City Council business:

The council voted 7-0 against the rezoning of 5.35 acres on 169 and 175 Richneck Road in Denbigh. The rezoning would have allowed for a Newport News developer, A & Properties LLC, to built 44 townhouses there. More than 20 Hanover Heights residents spoke out against the rezoning because of concerns about increased traffic and more flooding potentially caused by the proposed development.

Copyright © 2008, Newport News, Va., Daily Press


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