Reservoir Talks Hit Hurdle

Before the Cobb County-Marietta Water Authority proceeds with an offer to take full ownership of Canton's Hickory Log Creek Reservoir, unresolved issues with the U.S. Army Corps of Engineers must be settled, a Pennsylvania consultant has told the agency.

"Decisions yet to be made by the Corps could limit the usefulness of the City's Entitlement Shares to the Authority and, in a worst case, could completely extinguish the value of the additional shares to the Authority," consultant Howard Woods wrote in a Feb. 22 letter to authority general manager Glenn Page. "A final determination of these issues should be obtained prior to any transfer of Entitlement shares."

Saddled with debt—much of it from the reservoir, which has taken years to build and run millions over budget—the Canton City Council spent much of 2011 discussing if it should sell its 25 percent stake in the reservoir.

Selling it would relieve the city of more than $28 million in debt, officials have estimated.

The City Council  with Cobb-Marietta and the Cherokee Water & Sewerage Authority last August.

The endorsement came in the form of a non-binding memorandum of understanding that outlined what a possible merger would look like (see infobox at the bottom of this story for details). Cobb would take full ownership and operational responsibility of the reservoir. Cherokee would take ownership of Canton's treatment plants and provide water and sewer to the city.

The  during its Aug. 29 meeting. The Cobb-Marietta group, however, neither accepted nor rejected the offer during its Sept. 19 meeting, opting to take the offer under advisement, according to the Atlanta Journal-Constitution.

In January, the Cobb County-Marietta Water Authority . In the Feb. 22 letter, Woods said he couldn't give the agency an answer.

"Because the Authority will withdraw water at a point significantly downstream and in a Corps reservoir (i.e., Lake Allatoona), the actual benefit to the Authority of any additional yield from Hickory Log Creek is uncertain," he wrote. "When the impact of the Corps operating rules at Lake Allatoona is determined, I will be a position to promptly issue a final draft report for your review. However, this is such an extremely important issue that I am not able to complete the evaluation without a resolution to this matter."

For the full text of Woods' letter, open the attached PDF.

NON-BINDING MEMORANDUM OF UNDERSTANDING

 According to the memo, this is the verbatim proposal on the table:

• Cobb will pay Canton an amount equal to the total paid by Canton on its bonds for the Reservoir.
• Cobb will assume the remaining bonded indebtedness owed by Canton for the Reservoir.
• Canton will relinquish 5.2 million gallons per day of the Reservoir capacity to Cobb. The remaining 6 million gallons per day of Canton's current capacity shall be transferred to Cherokee to be held and used for Canton's future water supply needs.
• The agreement between Cobb and Canton as to the joint operation of the Reservoir will terminate, so that Cobb-Marietta will have full decision-making authority over the Reservoir and Canton will no longer have any responsibility for the expenses of the Reservoir.
• The Reservoir shall remain available for recreational use by the public, as provided in the Reservoir Management Plan.
• Canton shall transfer its water and sewer treatment plants to Cherokee, and Cherokee shall assume responsibility for operating and maintaining the plants. Cherokee shall not be required to keep the plans operational and shall have the sole discretion to decommission the plans.
• Cherokee will sell water to Canton at its wholesale rates.
• Cherokee will provide sewage treatment to Canton at its wholesale rates.
• Canton will remain responsible for operation and maintenance of the water distribution system, including customer service and billing/collection of customer accounts.
• Canton will remain responsible for the sewer collection system, including customer service and billing/collection of customer accounts.
• All agreements between Canton and Cherokee regarding water and sewer shall terminate and be superseded by the final agreement contemplated by this Memorandum of Understanding.