Cost to repair Columbia Canal: $100 million

Columbia is facing the prospect of having to dip into its reserves or seek short-term loans to help pay for $132.5 million in flood damage, most of it to the Columbia Canal.

City manager Teresa Wilson disclosed Wednesday, for the first time, that repairs to the breached and weakened canal are likely to cost $100 million – most of which city officials expect to be covered by federal money.

“We’ve been told the canal mitigation is the largest in the state,” Wilson said of damage reports that Columbia officials have received from the Federal Emergency Management Agency and state flood-recovery authorities.

So far, Columbia has paid $10 million out of its own pocket to fix the canal, the primary water source for the downtown treatment plant that supplies water to about 188,000 customers. The city has asked FEMA to pay the entire canal bill, Wilson said.

FEMA has said it will pay at least 75 percent of most flood-damage costs. If it sticks to that figure, that could leave the city with a $25 million bill just for the canal, Mayor Steve Benjamin said.

Asked if such a big bill would lead to higher water or sewer rates — beyond the nearly 10 percent increase that took effect in July — Benjamin said, “I’m not going to support any (flood-caused) rate increases.”

The city’s next largest flood-repair project, Wilson said in a report delivered to a S.C. House budget-writing committee, is at least $10 million to fix Columbia’s already deteriorated sewer system.

Separately, the city still faces a 10-year, $750 million tab for court-ordered repairs to the sewer system.

Chief financial officer Jeff Palen said there are three options for paying costs that neither the state nor Washington will cover:

▪  Tap any savings left over from a projected $120 million in water and sewer projects already budgeted or under construction.

▪  Get short-term loans that would cover repair costs as they arise.

▪  Draw the money from the $100 million in reserves that the city holds in water and sewer accounts. The city already has taken $10 million from those accounts to pay for initial repairs to the canal and water-treatment plant, Palen said.

Wilson doesn’t like the idea of drawing down the reserves because that could hurt the city’s credit rating. “It’s not advisable,” she said. “We wouldn’t want to resort to that.”

City Council, ultimately, will have to settle on a funding option or a combination of them, but that won’t happen until city staff have a better idea of how much of the overall tab the state, FEMA and other federal agencies might pick up, Wilson and Palen said. That determination is expected by the end of March after City Hall hires a team of consultants to evaluate projects and guide the city’s decisions, she said.

The plan at this point is to strengthen the canal, not to replace its three-mile levee with a new one, Wilson said. But city staff want the upgraded canal to be able to withstand future floods, she said.

A 60-foot hole in the canal’s dike has been plugged, but permanent repairs likely won’t begin until the spring or summer, said Joey Jaco, Columbia’s director of utilities. A temporary boulder dam across the 125-foot canal has created a reservoir to feed the water-treatment plant until the dike and canal are restored.

Completely repairing the canal’s breach could take at least 12 months, assistant city manager Missy Gentry said.

In addition to the $132 million in flood damage, Wilson is resisting cutbacks to the city’s plans to spend the $120 million for the next five years to upgrade its water and sewer systems.

“We have no intention of pulling back on those numbers,” she said.

This story was originally published November 18, 2015 at 7:39 PM with the headline "Cost to repair Columbia Canal: $100 million."