On Mancha Avenue in the riverfront town of Claremont in Surry County stands a rusted tower that’s so overgrown with vegetation, motorists may not even notice it among the surrounding trees.

The roughly 22,000-gallon tank once held the town’s drinking water, but according to the Virginia Department of Health, it hasn’t been used in decades. In 2012, the VDH warned town officials that without that tower, Claremont’s waterworks had insufficient capacity for the 300-plus users on its system at the time, but plans to replace the tower remain stalled after nine years.

The VDH had offered the town a $1.8 million loan in 2016 for a new tower and related upgrades, but withdrew the offer earlier this year owing to the project’s lack of progress. According to Mayor George Edwards, the town is now waiting to hear back from the U.S. Department of Agriculture on an alternative funding proposal.

In 2012, the VDH’s Office of Drinking Water wrote to Edwards, taking issue with the roughly 300 water users on the town’s system given that Claremont’s waterworks permit lists a design capacity of up to 47,200 gallons per day, which is only enough to supply 193 residential connections.

The 193 figure is also predicated on the town’s water tower and well house both being in operation, but according to the letter, Claremont’s tower has been out of service since at least 1983. A follow-up letter from VDH Office of Drinking Water District Engineer Kendra Hardy states the structural integrity of the tower is questionable, given that vegetation covers a portion of it and there is evidence of rust on its legs.

According to the VDH correspondence, without the elevated storage tank, the town of roughly 350 people has an effective water storage capacity to serve fewer than 10 residential connections and can’t provide sufficient flow for fire hydrants.

The VDH proposed four options in 2012 to remedy the issue, ranging in estimated cost from $250,000 to upwards of $600,000. Two involved refurbishing and restarting use of the town’s existing water tower, and two recommended demolishing the old 22,000-gallon tower and replacing it with one capable of storing 130,000 gallons.

By 2015, Edwards had stepped down from his role as mayor. His successor, Louise Hansch, wrote to the Office of Drinking Water on Feb. 24 of that year asking that the town’s permitted number of waterworks connections be increased to a total of 300. The VDH replied March 16, 2015, denying her request on the grounds that the town’s storage capacity was “far less than what is required” by state waterworks regulations.

In 2016, Hansch applied on behalf of the town to the VDH for funding assistance in the amount of $1.8 million. In that application, she proposed using the money to construct one 50,000-gallon elevated storage tank, demolish the existing tank and upgrade or replace 22,000 linear feet of 4-inch and less water lines to 6-inch ones with roughly 64 fire hydrants. Though the 50,000-gallon proposal is far less than the 130,000-gallon tank the state said was needed, “changed” is handwritten in the margin of the town’s copy of the application, with an arrow drawn pointing toward the project’s description. But there’s no other notation as to whether the tank capacity was what had changed or if so, what the new capacity would be.

Per that application, the town was to close on the loan with the Virginia Resources Authority, which co-administers the VDH’s Drinking Water State Revolving Fund, by Jan. 30, 2017, begin construction by Feb. 7, 2017 and have the new tower completed by Feb. 7, 2018. Hansch received a response from the VDH on Oct. 5, 2016 approving her request for a loan and offering the town two options for repayment: a $1.6 million 30-year loan at 2.65% interest coupled with $193,000 principal forgiveness if the town were to agree to raise its water rates per a schedule set by the VDH, or 100% of the $1.8 million being repayable over 30 years at 2.65% interest if the town was unwilling to raise its rates. The town chose the former, committing to nearly double its water rates from the then-current $26.84 minimum being billed to residents each month to a target monthly minimum of $46.22.

But the town never closed on the loan.

By 2019, Hansch had stepped down and Edwards was once again serving as the town’s mayor. That year, he received a letter from the Virginia Resources Authority informing him that closing on the loan could not occur “until all applicable pre-closing conditions have been met.” Among these conditions was the VRA’s expectation that principal repayment “be supported by the moral obligation of Surry County.”

According to Kelly Ward, director of the Drinking Water State Revolving Fund, a moral obligation pledge is a form of credit enhancement typically provided by a government to another entity. In the event that Claremont should ever default on a payment, the government entity pledging its moral obligation — in this case, Surry County — would agree to make the payment.

“This is subject to a budget appropriation and is not legally binding,” Ward said.

The 2019 letter then warns that if closing does not occur by April 30, 2020, the VRA and the Department of Health reserve the right to withdraw the loan money for not completing the requirements in a timely manner.

Edwards received a follow-up letter Aug. 25, 2020, this time from the VDH, warning him that a review of the agency’s records “indicates that multiple milestones in the approved project schedule have not been met,” and again warning of the agency’s right to bypass the project and reallocate the loan money if funding assistance agreements were not executed or construction was not initiated within 12 months.

“If this delay has been caused by COVID-19, then please document the specific circumstances including an estimate of how much time this has delayed the project,” writes Keith J. Kornegay, project team leader of financial and construction assistance programs for the Office of Drinking Water.

Kornegay further asked that the town submit a revised construction project schedule.

Edwards received another letter from the VDH Dec. 16, 2020, this time from Ward, warning that the VDH was planning to reallocate Claremont’s loan money to another project unless the town responded in writing by Jan. 16, 2021 with reasons for the delay and a proposed work plan. Handwritten on that letter is a note that reads “called 1-11-2021 left message, GE.”

Ward confirmed to The Smithfield Times that the VDH followed through with its ultimatum earlier this year and officially bypassed Claremont’s water tower project.

“The funds will be reallocated to other projects,” Ward said.

Howell Godfrey Jr., a resident of Claremont, began organizing a petition last year to dissolve the town’s charter. Were that to happen, Claremont would cease to have its own elected government separate from Surry County.

The town’s “need of financial assistance” for the waterworks upgrades is among the reasons Godfrey listed in the petition, which seeks to initiate the process outlined in state law for consolidating local governments. As of June 9, that petition had 82 signatures, Godfrey said.

County Administrator Melissa Rollins also referenced the costly waterworks project and Claremont’s allegedly having requested financial assistance from the county in an Oct. 26, 2020 letter she sent the mayor recapping a joint meeting of town, county and state officials on Oct. 19 from her perspective.

However, Claremont’s mayor wrote back Nov. 2 that year, stating the town was “more than capable of being financially self-sufficient” and that “assistance with funding for the town was never a consideration.” All the town had asked of the county was to sign as a guarantor on the town’s loan.

Ward said she’d spoken with Edwards by phone in January this year, at which time he allegedly told her that the county had been unwilling to provide the moral obligation pledge.

“The guarantor’s signature, that seemed to be the sticking point,” Edwards said.

But Surry Board of Supervisors Chairman Robert Elliott said during a January 2021 meeting with Godfrey and his co-organizers that the reason the county didn’t sign for the loan was because the town never properly asked. The request for a signature had come solely from Edwards, and not the entirety of Claremont’s Town Council, he said.

With the VDH loan issue now moot, Claremont is waiting for the USDA on a funding package Edwards said won’t require the county to co-sign. Currently, the federal agency is reviewing the town’s financial documentation, and has provided no information on when that review will be complete, Edwards said.

But, “at this time there’s no reason not to keep a positive attitude about this,” he said. “We have nothing negative from USDA at this point so we’re feeling very positive about this.”