Aqua NC has proposed a public-private partnership (see p. 3) with the Town of Kill Devil Hills (KDH) for its sewer system. Like all of the Outer Banks, KDH has unique water/wastewater challenges due to its position on a narrow strip of land. Recent rapid development has resulted in overcommitted wastewater treatment capacity. Currently a small local company owns the plant and some of the lines. Aqua NC proposes to buy and operate the wastewater treatment plant while the Town owns the lines, with investments by Aqua financing about $1.6 million in improvements. KDH would pay Aqua directly and then bill customers to make up for this amount, including Aqua’s substantial returns on equity financing, debt financing, and annual overhead.
Though $1.6 million in up-front funds for improvements appeal to local decision-makers, KDH would lose some local control of the system, and residents’ sewer rates would climb. A memo from the Town manager implies KDH would retain oversight of costs and rate of return calculations through “open book” accounting. However, some town officials have researched Aqua NC’s track record in other locations and have doubts about the deal being in the community’s best interest.