Town receives dismal outlook; time remains to right the ship
Becky Garland
Fontana Dam – In a nearly two-hour council meeting Jan. 17, Fontana Dam’s woes bubbled to the surface, much like the town’s operator in responsible charge hopes a lingering water leak will soon do.
Pure and simple, the smallest municipality in North Carolina has drifted into dangerous waters. Funds are low, water loss is high and a longstanding understanding between whomever is operating the town’s lone source of revenue – Fontana Village Resort & Marina – has reached an impasse in the wake of new ownership seizing the reins last year.
Much like the structure that bears the town’s namesake, the problems may be damned up. But there is light at the end of the tunnel.
Finances
There were more special guests than normally seen at the meeting.
One of the dignitaries in attendance was a name familiar to Graham County residents: Becky Garland. The county’s former finance officer – and for a stint, manager – now serves as a unit coach for the Local Government Commission, with her coverage area stretching from Burke County (Morganton) west to Cherokee County (Murphy).
As her job title divulges, Garland advises government boards on issues. It was clear that Garland had done her homework before the meeting, as she warned the council what could happen if cash flow does not improve by the end of the fiscal year on June 30): the town could cease to exist.
“There are towns that have gone out of business,” Garland said. “If there’s no revenue coming in, some hard decisions are going to have to be made.”
Garland cited several financial points to back up the concern. Of note, she said it was not necessarily a requirement, but the Local Government Commission “likes to see the fund balance at 131 percent of expenditures” on June 30. Fontana Dam was at 90 percent when 2023 concluded.
Furthermore, it goes without saying that the town cannot finish the 2023-24 fiscal year in the red. Garland pointed out glaring setbacks this would cause to the town: aside from the money already waiting in the wings to upgrade the town’s aging water lines (first installed in the 1940s, when the dam itself was being built), there would be no chance of procuring any other grants that may come along.
Additionally, the town would have to forfeit its charter to the state General Assembly. The fate of the area – and its water plant – would then rest in the Legislature’s hands.
“You’re at a crossroads,” Garland said. “If you get no more revenue, (you) have eight months left to operate (from what is in) the general fund, if you continue to operate at the same expenditure level.”
Fee disputes
Fontana Dam’s main source of income comes from user fees at Fontana Village Resort. The popular vacation destination is undergoing its first serious facelift since opening in 1975, with a new ownership group (Fontana Ventures LLC, operating under the MMI Hotel Group as of June 22, 2023) investing heavily into new branding and an upgraded facade.
The user fees can range anywhere from the town helping with trash removal to the various water usages at the resort itself.
The town was caught in a bad position 3 ½ years ago, when the COVID pandemic hit and the lessees bailed on the agreement with the Tennessee Valley Authority (which owns the land the town and resort sit on). At that time, money mismanagement had ran up a past-due bill on user fees in the neighborhood of $90,000; without a written agreement in place, the town was forced to take a settlement for pennies on the dollar when attempts were made to collect on the debt.
It has not been publicly stated what the hold-ups are, but the new ownership has yet to agree to terms with the town on user fees. Things seemed harmonious enough with Fontana Village General Manager Jason Caughron on-hand for the Jan. 17 proceedings; in fact, he indicated a quick conversation with one or two talking points could lead to a “really quick” resolution to the matter.
“We want the town to stay intact,” Caughron said. “There have been growing pains, but I think we make progress every day. From the standpoint of the resort, we want to work with you guys – but it’s a business operation, and it’s got to be sustainable.”
Water woes
Garland’s conversation followed a lengthy, opening discussion with the town’s operator in responsible charge over the water/wastewater facility, Carrie Stewart.
The well-documented water loss can no doubt be chalked up to the clay pipes mentioned above. Money has been sunk into locating the source of loss – including sonar readings – but to no avail.
Stewart all but opened her monthly report by noting that a new order of chemicals (such as chlorine) were needed. Town Administrator Zelerie Rogers was astounded, as supplies were just delivered in December.
However, the rapid usage of treatment can easily be translated. Despite all the efforts thus far, Stewart is still reporting water loss at 70-75 percent of what the plant produces.
Throughout the search for the loss, Stewart said the town had “valved off the whole village.”
There is one section left that has not felt the upgrade as of yet, though: the administration building, which was condemned and closed at the end of December. The structure served as the town’s hospital during the dam’s construction in the 1940s and most recently included the town’s offices; a space for a private business, Massage at Tiffany’s; and employee housing.
Stewart said with the previous occupancy, there was little that could be done to scope out the lines running to the building; now that it is empty, the source could be addressed by placing a cutoff valve along the plumbing path on N.C. 28, from Hellbender Pitstop to the vacant structure.
Finishing out her pitch, Stewart expanded on the concept by citing her idea to cut off portions of the lines during the current “dead” season for the village (business normally booms from March-October), to isolate sections at a time and see if the massive water loss reveals itself.
Elsewhere, there are three back-up generators on standby. None of the machines have underwent a load test – but that will soon change.
Obviously, the generators act as a necessity; a power outage would cut off the water supply to the town/resort.
The council unanimously approved quotes from Penrose-based Carolina Energy Systems totaling $3,878.75, which provides one maintenance visit a year for each generator.