The good news is Ellerbe is in line to get help to improve sewer service.

The bad news is in order to be eligible for grants and loans to do it, the town will have to raise wastewater rates.

As the county’s top Golden LEAF grant designee, Ellerbe held a special town meeting Monday night to determine the next steps for its sewer project.

“Economic development follows water, sewer, and traffic access,” said Lumber River Council of Governments Representative Jim Perry of the town’s milestone success.

According to Perry, the total cost to complete the Ellerbe-Richmond County-Rockingham Wastewater Regionalization Initiative will be about $4.5 million. The project entails running a sewer line along the U.S. Hwy 220 corridor from the Ellerbe area to the City of Rockingham’s wastewater treatment plant.

Richmond County government received the green light from the county’s Golden LEAF steering committee earlier this month to pursue $1 million in funding for the project.

“With this kind of money, lenders are going to be much friendlier to talk with,” said Jean Klein of Klein Consulting in Apex. She accompanied Perry to the meeting to explain the town’s options for sources of additional grant and loan funding to complete the project.

According to Klein, Ellerbe will have to raise water and/or sewer rates in the future.

“You have been operating on a very modest budget,” said Klein, who added that the town’s sewer operation costs are not being covered by its current rates, so it is losing money in that department. This fact has apparently not been reflected in recent reports from the town’s contract auditor.”

In order to be eligible for outside funding, towns water and sewer rates must be equal to 1.5 percent of the median household income.

Perry outlined a possible payment pool that included the $1 million from Golden LEAF (which still must be presented to and approved by the foundation); hopefully some money from the county (penciled in at $400,000, though Perry said he was by no means speaking for the county); and a contribution from Ellerbe. If all goes well, Perry said that plan could get the town about half way there. The rest will have to come from loans and grants.

Klein has had extensive town manager experience in that area, including a similar project in Holly Springs.

She gave four funding options: Supplemental grant funds from the North Carolina Rural Center, grants from the Clean Water Management Trust Fund, low-interest loans from the state Department of Environment and Natural Resources, and low-interest loans and grants from the U.S. Department of Agriculture Water and Wastewater Program.

Availability and requirements were different for each of the funding avenues, except for the fact that all four organizations required water and sewer rates to be at 1.5 percent of median household income. Klein said the number that lenders are going to use is determined by adjusting figures from the 2000 U.S. Census to reflect current levels.

She named that figure as being $24,708. There was some disagreement from various council members, who said that Ellerbe’s median was much lower, but she said that, regardless, that is the number that lenders will use.

According to Perry, another step to take in the near future will be to meet with agencies and send a signal to Rockingham that Ellerbe is open to terms of an inter-governmental wastewater agreement.

Klein said that Rockingham had given Ellerbe a “very nice offer” in that there is no capacity fee involved.