North Carolina Towns Seek Aid After Building Utilities for Industries that Left

A dozen North Carolina municipalities have joined together to lobby state and federal officials for help in paying debts incurred to accommodate textile companies that have disappeared.

They're presenting the problem as another result of global trade pressures that have seen U.S. manufacturing operations move to countries where labor and materials are cheaper. North Carolina has seen at least 86 textile plants close since early 1997.

Most of the textile towns have raised their water or sewer rates as much as their remaining customers can bear.

In Morganton, customers have seen a 100 percent increase in sewer rates in less than 10 years. This increase was still not enough to cover the town's debt service of $2 million a year.

Morganton leaders expanded water and sewer treatment systems to handle flows required by its textile companies. In the past six years, six plants have closed.

"We didn't go into this blindly," Morganton town manager Sally W. Sandy said.

In 1995, after more than two years of discussions with local plant operators, the Burke County town launched a $15 million sewage-treatment expansion project and $3 million in upgrades to its water system.

At the time, Morganton had an 8-million-gallon-capacity sewage-treatment plant that was routinely running at 80 percent of capacity, a level at which state regulations require improvements.

With assurances from the mills that they would help carry the cost burden, the town began the work. By the time the improvements were complete two years later, three of the mills had already closed.

Now, Morganton is treating about 7 million gallons of water a day in a plant that can handle 18 million gallons. Its sewage-treatment plant, which can handle 10.5 million gallons a day, is treating about 3.5 million gallons.

"You would think you could save money by reducing the work your equipment is doing," Sandy said. "But you can't just leave that machinery sitting. You wouldn't believe how expensive it is just to keep it in working order."

So far, Sandy said, the town has kept up its debt-service payments, a priority because the town doesn't want its good credit rating to slip and make it more difficult to borrow money later. But like other towns, it had to make cuts to do so.

Valdese, also in Burke County, needs to make at least $300,000 worth of repairs to three of its aging sewer lines, primarily to serve its remaining textile manufacturers, town manager Jeffrey Morse said. But the town of about 4,500 residents already is paying $600,000 a year in interest on $6 million in loans it took out over the past 15 years to expand water and wastewater treatment services.

The work was done mostly to serve the town's textile plants, Morse said.

The town's biggest plant, Island Textiles, which used a half-million gallons of water and sewer a day, closed in 2001. Town utilities are now operating at a deficit of about $314,000 per year, Morse said.

When Morse realized that the town doesn't have the money to make repairs and that it can't shoulder any more debt, he wondered if funds might be available through federal programs designed to help with the transition to a global economy.

Although there is money for things such as retraining people put out of work as a result of national trade policies, Morse found nothing designed to hold up an entire community when its industry leaves.

Morse learned that about 15 former textile towns had similar situations, including Belmont, Bessemer City, Gastonia, Mount Airy, Shelby, Stanley and Marion.

A dozen agreed to form a coalition that would pool funds to pay a lobbyist to take their cause to state and federal legislators.

So far, the group has not succeeded in getting any money, but its request to Congress for emergency grants for needed projects is still pending.

News & Observer

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