With revenue not meeting expectations, Brookhaven officials arestudying options to make a $160,000 bond issue payment on May 1 andwill meet with representatives of Specialty Minerals Inc. to gaugethe industry’s future water usage plans.

With revenue not meeting expectations, Brookhaven officials arestudying options to make a $160,000 bond issue payment on May 1 andwill meet with representatives of Specialty Minerals Inc. to gaugethe industry’s future water usage plans.

In approving a $2.2 million revenue bond issue to furnishinfrastructure to the new plant in the industrial park last year,payment plans were based on expected revenue from SMI’s heavy wateruse. However, at Tuesday’s mayor and aldermen meeting, cityofficials said that usage has been “a little slow” and “erratic” asthe company starts up, develops and markets a new vinyl-sidingrelated product.

City Clerk Iris Rudman said about $20,000 more a month in waterrevenue was to be needed to meet the bond payment schedule.Additional, monthly revenue has fluctuated between $21,000, whichis in line with original SMI water usage estimations, and a low of$3,600.

An $80,000 Nov. 1 bond payment was made with no problem, Rudmansaid. Since then, estimated revenue available to meet the $160,000May 1 payment is around $34,000 with March and April collectionsstill to come in, she said.

Rudman said she was required to notify City Engineer Carl RayFurr when revenue was not coming in as expected. Furr discussed thesituation with city officials last night.

“What we don’t want to do is let this go too much further,” Furrsaid.

To that end, as required by the bond issue ordinance, aldermenvoted to have Furr do a study to evaluate city water rates. Thestudy is expected to take about 90 days.

“That rate study will be looked at very closely,” Furr said.

Furr emphasized the study will examine rates of heavy waterusers among businesses and industries. He said the rate study wouldnot affect residential water customers.

With a more consistent water usage level, city officials saidthey could make plans to accommodate bond payment schedules.Current SMI usage levels were described as “erratic,” but cityofficials said those levels already are starting to pick up andshould be up to expectations in six to 18 months.

To meet the May 1 payment, Rudman and City Attorney Joe Fernaldsaid they would be meeting with the bond attorney this week to goover options.

Under ordinance provisions, Rudman said a reserve fund isavailable to make the payment, but it would have to be replenished.A loan was another possibility.

A course of action for aldermen to approve is expected at thenext meeting.

Officials on all sides of the issue saw no long-term problemswith meeting the payment schedule. Current difficulties wereattributed to SMI’s new product start up and slow marketconditions.

“We’ve got allow them enough time,” Rudman said.

Fernald said city officials, chamber of commerce and IndustrialDevelopment Foundation leaders, engineers and SMI representativesare involved in trying to reach a solution.

“Everybody is working together on this,” Fernald said.

When reached for comment, Rick Honey, SMI director

of corporate communications, was optimistic about thefuture.

“Specialty Minerals Inc. is working with city officials toarrive at an agreeable and equitable solution that will allow thecity to meet its bond payment obligations,” Honey said.

Honey said water usage at the Brookhaven facility was “somewhatbelow” original estimates because of slower product developmentbecause of a weak demand in the construction market for specialtyPCC. Once the plant is up to full speed, he said water usage willincrease.

Chandler Russ, executive vice-president of theBrookhaven-Lincoln County Chamber of Commerce, said the chamber’srole is to act as a liaison in building a “good positive dialogue”between the city and SMI. He said SMI has faced a “flat market” asit has rolled out its new product.

“The demand for the product has not been what they anticipated,”Russ said. “With that, the water usage levels have not been wherewe anticipated.”

During last night’s meeting, Fernald said the bond issue couldnot be linked directly to water usage revenue from SMI. To do so,he said what have taken more time than the city and SMI had andwould have been more expensive.