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Mill Creek Water Plant and the WCSA
What the Town Manager has told Mayor and Town Council about the Mill Creek water plant and the WCSA, report by report, since February 2022.
12 reports, February 2022 to October 2025
2025
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Improved Water Capacity/WCSA
Town staff, Washington County Service Authority staff, Hurt & Proffitt, and the Virginia Department of Health (VDH) continue with sampling at the town spring that was taken offline in the 1990s, are planning a required flow metering system, along with other steps to determine if the spring can be brought back online as an additional input into the town’s water system. I will update you further once initial results are tabulated.
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Improved Water Capacity/WCSA
To address increased demand and to also plan for contingencies, the town continues to investigate the viability of bringing back online a former town spring that was brought offline in the early 1990s. A meeting is scheduled for mid-September between the town, the Washington County Service Authority, our engineering consultants, and the Virginia Department of Health to gauge our progress thus far and determine our investigative process going forward.
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Improved Water Capacity/WCSA
To address increased demand and to also plan for contingencies, the town continues to investigate the viability of bringing back online a former town spring that was brought offline in the early 1990s. Mr. Don Cole approached me about this possibility a few months ago and since that time, the town staff have begun to sample the spring’s outflow, measure high flow/low flow volumes, etc. After initial positive results, the town has begun to partner with the Washington County Service Authority and the Virginia Department of Health (VDH). Mr. Cole and I met with both entities on July 28th and were given approval by VDH to continue our investigation process. I commend Mr. Cole, the town’s Water/Wastewater operators and our Public Works staff for leading these efforts.
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Washington County Service Authority
On June 4th, Don Cole, Tyler Keen, Felicia Eller, and I attended a meeting at the main offices of the Washington County Service Authority (WCSA). We met with their leadership team to discuss the status of the VDH FCAP funding application that, if approved, will facilitate needed pump repairs/improvements at the Mill Creek Water Treatment Plant as well as a possible interconnect between the Town of Chilhowie water system and the WCSA system along Highway 11 just west of town. This interconnect has been discussed and debated since at least 2015. If ever able to be constructed, it would provide a critical backup source of water for the town, as well as increased capacity for Pathway Park, which could offer an incentive for industry location.
In addition to this grant application, we discussed tree removal at the Mill Creek Plant, updated each other on the status of projects in our service areas, compared notes on our interactions with FEMA, and looked at some of the meter types that WCSA uses in their system as we prepare for our upcoming water meter replacement project.
I feel that the meeting was very productive and we intend to continue having these meetings on a semi-annual basis.
2024
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Washington County Service Authority
I and other staff members met with the General Manager and Chief Engineer for the Washington County Service Authority on Wednesday, November 13th. This is the first meeting between the town and WCSA in at least two years. We as your staff felt that it is important to have a strong relationship between both entities considering the shared responsibility of properly maintaining our water treatment plant, not only for today, but also to effectively plan for future growth. It is my intention to get on track with having quarterly meetings with them so that we have a better understanding of day-to-day happenings and to also ensure that water allocation is always in line with the agreement signed in June 2022.
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Completion of Work at Mill Creek Regional Water Treatment Plant Project (WYP) Chlorine Contact Tank Project
You have in your agenda packet several documents relating to the completion of the WTP Chlorine Contact Tank Project. These include “Notice of Acceptability of Work” signed by Washington County Service Authority (WCSA) Engineering Manager Ryan Kiser, Change Order # 1 on the project, and the final pay request #6.
Regarding the “Acceptability of Work” this document was signed by the certifying engineer, this case Ryan Kiser as mentioned above on March 21. This would be done by a consulting engineer if the Town had been doing a similar project since we have no licensed Professional Engineer on staff. But since we are partnered with the WCSA, and they do have licensed engineers, this task was done by them. My March 21 letter to Rural Development concurs with Ryan’s assessment and needed to be executed since we are the owner.
Regarding Change Order Number 1, this was executed due to the time frame of the project. The project was initially supposed to be substantially completed about a year ago, but because of delays in getting tank components, which was known at the bidding / Notice of Award, and winter weather 355 days was added to Mid Atlantic Storage Systems’, Inc. Contract. You can read more on that in the “Description” narrative on the Change Order.
Regarding Requisition #6 the $107,836.45 request is the last scheduled payment. You can see the breakdown of the cost sharing on my letter to Robert Hilt on March 21. On the last sheet of the packet at the top you can see the total project breakdown - $266,944 Chilhowie; $326,388.8 WCSA; $633,388.8 Rural Development; $90,000 Mt. Rogers PDC. The Town / WCSA breakdown was 45% / 55%, respectively. The Town’s portion was scheduled to come out of the American Rescue Plan Act, but will have to do further reckoning to ascertain what accounts that money came from.
2023
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Pay Request Number 4 Mill Creek Regional Water Treatment Plant Chlorine Contact Tanks
You have in your agenda packet Pay Request Number 4 on the Chlorine Contact Tanks at the Mill Creek Regional Water Treatment Plant (WTP). The Total pay request is $237,120.16 with the Town’s share $60,969.42. As you can see Rural Development had some grant money involved and the balance was split with the Washington County Service Authority (WCSA) at 45% Town and 55% WCSA.
As you can see on the third page of the packet there is $457,831.99 is remaining on the contract. I would expect that would be disbursed in two or three payments including retainage over the next several months starting in February (anticipating a January shut down or slow down). The Town’s 45% share would be $206,024.40.
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Work at the Mill Creek Regional Water Treatment Plant (WTP) With Two Projects
Work is finishing and progressing at the WTP on two projects. One is for the Finished Water Pump Project and one with the Chlorine Contact Tanks Project.
Regarding the finished water pump project, the new pump has been installed and is in use now. It is capable of pumping as much water as the two old pumps combined. The two other existing pumps are available as backups in the unlikely event the new pump goes out. This pump system supplies water to the chlorine contact tanks with finished / processed water from the plant. As you can see by the attached invoice the total cost of the project is $222,500. By contract the Town’s responsibility is 45% or $100,125. This money will be taken out of the Town’s American Rescue Plan Act (ARPA) money.
Regarding the chlorine contact tanks one tank is now completed. The second old tank is slated to be demolished in October. The new one will then be constructed on the same site and finished early next year. Potable water ready for drinking from the plant, following its processes, is then pumped through the finished water pump and into those tanks for distribution into the system. As you may recall this project was bid out in early 2022 and Mid Atlantic Storage Systems of Richmond was awarded the low bid at $1,282,580. After using the remaining grant money from the funder Rural Development on the project, plus another grant source, the Town’s remaining 45% share on this project will be approximately $271,439.55. This amount will also be funded through the Town’s ARPA award.
Much of that money has already been spend. Approximately $688, 584.38 has been spent through three pay requests on the aforementioned $1,282,580 project cost.
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Beginning of Construction on Chlorine Contact Tanks / Closure of Mill Creek Regional Water Treatment (WTP) During Construction / Effects on Smyth County
As we have discussed earlier Mid Atlantic Storage System will soon be working at the WTP to begin work on the two chlorine contact tanks. I have attached some pictures of the company mobilizing for the job. This will necessitate having to operate only one of the two on site tanks for approximately 150 days to 180 days. This will reduce the production of the plant to no higher than approximately 830 gallons per minute, or 1.1 million gallons per day. Almost all of that water will be coming to our system, not the Washington County Service (WCSA).
The Town Staff and the WCSA did a test run mid-month to test both our system and the WCSA’s (particularly their eastern part) to see the effects of running off one tank. Our system operated very well. The WCSA is tweaking some things after experiencing some issue on the eastern part of their system, which will necessitate them taking more water from the WCSA’s plant Below Abingdon.
Another issue arose, with taking the Mill Creek Plant off line, occurred the week of February 20 when the Smyth County system had a line and valve blow out that virtually emptied all their tanks in their region north and east of Chilhowie to near Highway 16 at Hungry Mother Park. We were able to resupply the County with their needs in about a 24 hour period (as an aside I sent you a video of the Board of Supervisors Meeting on February 24 where the Board and Staff praised the Town for its efforts). When our Mill Creek WTP tank work starts, if that situation occurs again, it will be impossible to resupply Smyth County completely again. Resupplying from the Town of Marion will be there only option.
To that plan for that emergency contingencies, particularly for Smyth County’s customers, the Town staff set up a meeting with WCSA and Smyth County on March 2. A large group representing the County including County Administrator Shawn Utt, WCSA Acting General Manager Ron Seay and his staff, and our staff were present. We wanted to make sure all parties involved knew of the situation of the Mill Creek plant construction in person, and that the County will have to draw off the Town of Marion for regular supply or emergency supply during that time.
After that water supply issue was discussed, the Smyth County staff left and the WCSA and Town personnel discussed the Mill Creek Contact Tanks Replacement project itself. I have previously discussed the financing of the $1.3 million project with you. The first tank will be going off line in the next couple of weeks and is slated to be done by May 9. The work on the second tank is slated to begin then and completed by the first of August. Council will receive monthly pay requests for approval for the project beginning in April.
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Update on Scheduled Work and Preparation at Mill Creek Regional Water Treatment Plant (WTP)
Begining the week of January 23 and through January 27 we began operating solely on Washington County Service Authority (WCSA) water and the WCSA did the same without using the Mill Creek Regional WTP. This is being done in preparation for taking the Mill Creek WTP off line when the two chlorine contract tanks are taken down and replaced. The project will begin on or about February 22.
To refresh Council and reintroduction to our newer Council members, the two chlorine contacts are to be replaced with me signing the Notice to Proceed on August 1, 2022, which is attached. These replacements were not part of the $3.2 million upgrade that was completed a couple of years ago, but in time it became clear that this project needed to be undertaken. The delay in the beginning of the project has been because of delay in receiving materials and the onset of cold weather.
You have in your agenda packet a document dated January 26, 2022 with the cost breakdowns and funding scenarios. As you can see the estimated cost of the construction is $1,346,707 through Mid Atlantic Storage system. Taking off the $653,510 remaining grant money from the aforementioned upgrade, and $100,000 from the Mt. Rogers Water and Wastewater grant the WCSA received, $603,199 is the funding shortfall. Using the joint agreement between the Town and the WCSA, the town’s 45% share will be $271,439.55. Council has previously voted to take this amount out of its American Rescue Plan Act (ARPA) funding.
Preliminarily the test went well for us using only WCSA water from their Abingdon location. We were able to adjust our system to make up for the loss of water supply and the tanks held up well. Works Director Jay Keen indicated the WCSA had more issue than the Town did interesting enough with some tanks on the eastern end of Washington County. Although the cost of the WCSA water from Abingdon is more than the Mill Creek plant, the WCSA personnel have indicated to us that that cost will be written off as part of the project cost.
2022
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Settlement of Dispute Between the Town of Chilhowie, the Washington County Service Authority (WCSA) and Frizzell Construction Company on the Mill Creek Regional Water Treatment Plant Project
After many months, and even years, the dispute between the Town, WCSA and Frizzell has been settled, to briefly recap, the project was substantially complete in 2019 but the Town and WCSA continued to have issues with the equipment at the new plant including pumps, valves and drives. The Town held the last pay request of $188,950.69 for retainage until those problems were corrected, and also alleged liquidated damage of $270,860 for the project since the project was several months late in completion. The liquidated damages were $580 per day. All performances and payment bods were held and not released until the dispute was settled.
The Town and WCSA hired Arnie Mason of Williams Mullen to represent us in the dispute. The firm is located in Northern Virginia and the WCSA had hired them in previous project disputes. Frizzell hired Brett Marston of Gentry Locke in Roanoke to represent them. Our attorney Paul Cassell and the WCSA’s attorney Thomas Dene of Dene and Dene assisted Mr. Mason throughout the negotiations.
While I cannot go into details of the settlement in this writing because of the confidentiality clause in the agreement, Paul Cassell will brief you and present the settlement agreement in Closed Session. I think it is safe to say that the agreement gives the Town and WCSA the necessary warranties and assurances to protect the plant well into the future. It also ensures that the public money invested in the new plant is money well spent. Additionally, if this case had not gone to court, if an agreement was not reached, Mr. Mason advised that the expenses would have easily exceeded the benefits, assuming the Town and the WCSA won the case.
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Chlorine Contact Tank Project at the Mill Creek Regional Water Treatment Plant (Plant)
To refresh Council memory, way back in December of 2021 the WCSA bid out the replacement of the finished water tanks at the plant and Mid Atlantic Storage of Richmond had the low bid of $1,282,580. Council approved the bid late Winter. As you may further recall a video of the existing tanks was presented to you around those times showing the deterioration of the tanks’ inside supporting structures and their poor conditions.
Works Superintendent Jay Keen, Water Operator Don Cole and me met with WCSA, Rural Development personnel and personnel with Mid Atlantic Storage for a Pre-Construction Conference on July 28. I copied the first Pre-Construction Agenda for your information. The Notice to Proceed was issued August 1.
Also attached is a January 26, 2022 document entitled in yellow high light “Mill Creek Contact Project”. The document gives the bid tabulation and breakdown of funding. In blue ink I revised the funding breakdown because $9,878.80 in additional funding was available from the original project in Construction Administration that was unspent. As you can further see the Town’s 45% responsibility is $266,994.09. (Before the adoption of the new agreement with WCSA the Town would have had a 56% responsibility). Council voted to use the American Rescue Plan Act money to fund this project.
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Upcoming Meeting of the Town of Chilhowie and Washington County Service Authority (WCSA) Steering Committee Relating to Mill Creek Regional Water Treatment Plant (WTP)
As you may recall, the 2021 yearly meeting of the Town / WCSA Steering Committee was continued from the Fall of last year. The Town’s elected official on the committee is Brent Foster. The staff of the Town and Attorney Paul Cassell, along with the WCSA staff and their attorney Thomas Dene have been working on revisions of the agreement since then. The continued meeting will be on February 15 at 9:00.
Without going into too much detail until the committee meets and then reports to Council in March, the changes from previous year agreements reflects new data that corresponds into new allocations and revised improvement/ replacement costs.
The old allocation at 2.5 million gallons per day (MGD) was at 56% Town and 44% WCSA. After the plant was upgraded to 3.1 MGD several years ago, the usage has been 45% Town and 55% WCSA. Interesting, even with the new allocation the Town’s MGD figure remains around 1.4MGD compared to the old agreement. WCSA’s increased by about .600 MGD to 1.705 MGD,
Most importantly, the new proposed agreement goes from 56% Town to 44% WCSA on improvement costs and on the $1,700,00 loan to 45% Town, 55% WCSA. This mirrors the allocation percentage at 45% Town and 55% WCSA and historic monthly usage. The Operation and Maintenance costs have always been passed on monthly usage.
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Mill Creek Regional Water Treatment Plant Chlorine Contact Replacement Project Funding Options
As you recall I presented the bid tabulations to council in December on replacing the Chlorine contact tanks at the WTP. The low bid was $1,282,580 from Mid Atlantic Storage Systems. which was a couple hundred thousand dollars above the estimate a year ago. We expected that the bid would be higher because the estimate was not made within the current bidding environment.
I stated that the WCSA was going to be negotiating with the contractor on lowering the price but as you can see by WCSA Director Robbie Cornett’s email to me of January 26, they were unsuccessful. The WCSA Board approved the bid on January 24.
As you can see by the document provided and highlighted entitled “Mill Creek Chlorine Contact Replacement Project”. The total project cost is estimated at $1,346,709 with a 5% contingency add on. Taking off the remaining $653,510 grant funds and a $90,000 grant from Mt. Rogers PDC, that leaves a remining balance of $603,100. The Town’s portion of that amount at 45% is $271,439.55.
This cost could be covered either by borrowing the money or taking the money from funding from the American Rescue Plan Act (ARPA). If the Town borrowed the money over a four year period, for example, that would be about $70,460 per year at 3%. That would entail raising water rates about 4.4%. I estimate the interest costs would be around $16,000 over four years.
Taking a portion from ARPA funding would reduce this burden, of course. Taking all the money from ARPA would eliminate any obligation but deplete the $1,765,854 amount. Council could decide what option to use at its Continued Meeting on February 8, or refer it to the Finance Committee for a recommendation at the March meeting. I don’t foresee a Notice to Proceed on the project until at least March, with payments to the contract beginning in April.