SYLACAUGA, Ala. – SylacaugaNews.com is doing something new in 2019. In a world full of constant negative news, we are turning attention to several features of our great city. Native Sylacaugan Michael Adair highlights what Sylacauga has to offer. First up: Sylacauga Utilities Board.
In the financial services world, clients are advised on the two distinctly different sides of their balance sheet: the asset side and the liability side.
Webster’s Dictionary defines an asset as “an item of value.” This differs vastly from the definition of liability, “one that acts as a disadvantage or obligation.” So, by definition, assets are far more exciting to discuss in the world of finance — and hope to be as exciting to focus on in this column. The column will highlight some of our greatest assets in my favorite city — the Marble City. The hope and objective is to shed light on some of the things that make Sylacauga great.
With this first venture into our greatest assets, it was rather easy to choose a starting point.
Since the early 1950’s the Sylacauga Utilities Board (SUB) has been serving our city and the surrounding areas in ways that most citizens don’t fully appreciate. Sylacauga is very fortunate to have her own utilities board — one that is very efficient, from an operations standpoint.
To get the context relating to the history of the department, we reached out to the general manager of the SUB, Mitch Miller. Mitch and his family are wonderful folks and our town is fortunate to have someone of his caliber leading the utilities board.
In conversation with Mitch, he states “during the early years of all of the systems (electric, water, gas, etc.) each utility was actually a separate department of the City. In the early 50s, the City needed to borrow money, but was unable to due to the money that it owed for the gas system that had just been installed. In order to free up some debt space, the City incorporated the gas board of the City of Sylacauga as a separate entity in 1952 and transferred all of the debt to it. By 1956, it needed to borrow again, so it transferred the water and electric departments to the gas board and the utilities board, as we know it today, was then formed. The board assumed the sewer system in 1976.”
Sylacauga Utilities is governed by a three-member board that serves six year staggered terms appointed by the city council. The strength of any organization is its people and that is certainly the case at SUB.
Sylacauga is fortunate to have an extremely talented organization. The board is managed by Miller who is an engineering graduate from Alabama. (While talking with Miller, I also learned that his son, Zachary, is currently at the top of his senior class at SHS). Finance manager, John Ham, has been at SUB for many years and brings a lot of experience to managing the board’s large balance sheet and day to day financials. Eric Carithers, the head of the electrical department and grid, brings a strong set of credentials to SUB. Eric is from just outside of Athens, Ga., where he was valedictorian of his class and has an electrical engineering degree from Georgia Tech. He has been at the board for many years. In talking to some of his coworkers, I quickly found that Eric has a strong skill set for running our electrical grid and its whopping coverage area of 16-square miles.
The water and sewer department at SUB is managed by Mike McGinnis and is a big part of our daily lives in Sylacauga. The water system consists of two wells, two water supply reservoirs (Lake Howard and Lake Virginia) as great assets, a conventional surface water treatment plant, and ten water storage tanks. The Board currently supplies an average of 3.2 million gallons of potable water per day. The primary source of potable water is the Pine Grove Well. This well was constructed in 2009 and placed in service on January 12, 2010. The Pine Grove Well has a capacity of 2.16 million gallons per day or 1,500 gallons per minute. Park Well located behind the Sylacauga Chamber of Commerce near the tennis courts has a capacity of .5 million gallons per day or 300 gallons per minute. Lake Howard has a water storage capacity of 1,075 million gallons while Lake Virginia has a storage capacity of 552 million gallons. The “safe” combined yield of Lake Howard and Lake Virginia is approximately 9.944 million gallons per day during extreme 120-days drought conditions. The ten storage tanks in the system have a combined storage capacity of 7.68 million gallons. The distribution system consists of approximately 253 miles of pipe ranging in size from 2-inches to 24-inches in diameter. There are 763 fire hydrants located within the system.
The sewer department operates two separate wastewater treatment plants. The wastewater collection system includes approximately 125 miles of gravity sewer lines and nine miles of force sewer lines ranging in size from four to 30-inches in diameter and eight lift stations. The Utilities Board provides sanitary sewer service to 6,112 customers. The average daily flow in 2018 was 2.76 million gallons per day. The combined peak treatment capacity of the two plants is currently 5.02 million gallons per day.
SUB’s gas department boasts well over 300 miles of gas line, serving customers as far as the outskirts of Alexander City and the Honda plant in Lincoln.
SUB also has state of the art internet through its telecom department managed by Reay Culp. The Board has recently begun an upgrade of the fiber optic network that increases available bandwidth to the outside world at a blazing 10 gigabits per second (GBPS). Newer technology now deployed to residential and business subscribers across the Sylacauga network will have 1 gbps capability. This provides a solution to customers and potential businesses that can’t be matched by other providers or in other cities.
So now for the important part: defining how SUB is one of our greatest assets.
As a starting point, the board employs 61 people in Sylacauga, in very stable, good paying positions.
Secondly, the board provides our citizens with competitively priced utilities. According to Miller, “we have evaluated our rates against Alabama Power on electricity: for a home that averaged 1,817 kw\month (which is an average consumption level), the Sylacauga Utilities Board charges would have been $2,223.90 for the year and the Alabama Power cost would have been $2,670.51. This is a savings of $446.61 or 20.1%.” This is an incredible savings for our citizens. SUB, in partnership with the Alabama Municipal Electric Cooperative (a joint purchasing group many cities in Alabama, of which SUB is a member), recently installed a solar panel farm outside on the Old Birmingham Hwy, which will help generate solar energy for its customers. This partnership is important because it allows the SUB to purchase power along with the other members of AMEC at lower prices that it could purchase as a stand alone power buyer.
As the conversation moved to our gas department, Miller stated “furthermore, we compared ourselves to Spire (formerly Alagasco) on the gas for FY 2018 (10/17-9/18) and found the following: For a home that averaged 65 ccf per month (heats home and water), the Sylacauga Utilities Board bill would have been $876.05 per year and for Spire it would have been $1,218.00. This is a savings of $341.04, or 39.0%.”
Most importantly, the profit this board generates for our city (while still maintaining lower rates than other utility providers for all of us citizens) is remarkable. This, in itself, is why SUB is worthy of the first in a series of the “Assets of The Marble City!”
For the FY year 2019, SUB has a budget of $44,992,340 in revenues and $41,289,857 in expenses, for a projected net profit of $3,702,857. SUB plans to transfer 70% of this net to the city (which figures at about $2,592,000) and retain the rest for future projects of the board and to continue to grow and improve our asset.
Thanks to the men and women that provide to us through the Sylacauga Utilities Board! Sylacauga is thankful for you and for the visionaries that laid the groundwork for our utilities board.
Until next time, let’s remember to treasure our valuable assets,
Michael Adair is a managing director with City National Rochdale, a New York-based investment firm. He was a member of the 1997 state championship baseball team at Sylacauga High School and he earned a finance degree from the University of Alabama in 2001. Michael, his wife, and their two children live in Sylacauga and are active in their church.