Lexington City Council last week unanimously approved an agreement with Rockbridge County to decommission Moores Creek dam and to make annual financial payments to the county every year beginning the year after the successful decommissioning of the dam.
The payments are to be made as compensation for the county releasing its rights to the Moores Creek reservoir as an emergency water supply.
“In addition to potentially utilizing resources better and not putting resources toward fixes that may not hold up in the future … it’s also a safety measure and this will help our neighbors be safer as well by decommissioning the dam,” Council member Nicholas Betts said during Council’s brief discussion of the proposed agreement at Thursday night’s Council meeting.
The most recent discussions of what to do with Moores Creek dam began in early 2025 following the discovery of a sinkhole at the base of the dam in December 2024. Per a 1986 agreement with the county, the city is responsible for maintaining the dam and the reservoir it creates as an emergency water supply for the city and county, though the water lines that run from the reservoir are not currently hooked to the Maury Service Authority’s system.
Lexington City Council approved $170,000 for an engineering study in March 2025, which returned two recommendations – repair the dam and install a toe berm at the base of the dam to reduce the seepage from the reservoir that caused the sinkhole, or decommission the dam and drain the reservoir.
Both options were estimated to cost between $2 and $3 million and would take about two years to complete.
At a work session in August 2025 to discuss the options, several members of Council expressed a preference for decommissioning the dam, in part due to the installation of a toe berm not being a guarantee against future seepage and more issues in the future, which could potentially lead to a failure of the dam.
The city began discussions with the Rockbridge County’s Board of Supervisors about its desire to decommission the dam, but as of March when Lexington was beginning to plan for the upcoming fiscal year, the county still had not committed to allowing the city to move forward with decommissioning the dam.
As a result, the city put a plan to install the toe berm and extend the water lines to connect to the MSA’s Enfield storage tank into its capital investment plan for the upcoming fiscal year, but also had $3 million listed under “not yet programmed” expenses for decommission of the dam.
Under the 1986 agreement, the county would be required to reimburse the city for the cost of extending the water lines, which would have cost either $3.75 million or more than $8.42 million, depending on which route the line would have taken.
The agreement which Lexington just approved will go before the Board of Supervisors at its April 27 meeting and will also be given to the Rockbridge County Public Service Authority for consideration, though Lexington City Manager Tom Carroll noted in a memo to Council regarding the agreement that he did not know when the PSA would have said considerations.
Under the proposed agreement, once the decommissioning of the dam is complete, Lexington will begin making annual payments to the county beginning at $85,000, which will increase each year by either 3 percent or “the percentage change in the Consumer Price Index for All Urban Consumers (CPIU), South Region, as published by the United States Bureau of Labor Statistics for the most recently available 12-month period,” whichever is lower.
The city will be required to make the annual payment by July 15 each year and the county will have “sole and unrestricted discretion” over how to utilize those funds.
The agreement also addressed the fact that some landowners draw water from the 11-mile waterline that runs from the Moores Creek charging pond toward Ross Road for agricultural purposes.
The city has, up to this point, owned and maintained the waterline, though no existing legal obligation has been found by either party requiring them to do so. If any of the property owners are able to produce any such legal agreements or documents requiring either the city or the county to maintain the pipe and provide water, the party with whom the agreement was made (either the city or the county) would either honor the agreement or negotiate a release from it with the owner.
In either case, through the agreement, Lexington commits “to working in good faith” with any property owners who can “demonstrate significant hardship from the loss of water due to the decommissioning of the dam.”
Any such claims of hardship must be submitted to the Lexington city manager within 12 months of completion of the decommission of the dam, and the city and the county will have 90 days after receiving the claim to consider whether there is hardship and to discuss what mitigation efforts, if any, will be undertaken.
Any “expenditure of public funds” for any mitigation efforts will be split evenly between the county and the city, and both localities “shall cooperate in good faith to minimize such costs.” Neither party will be responsible for any cost of any mitigation effort unless both parties agree to what mitigation efforts will be undertaken and the associated costs thereof. Unless they agree otherwise, the city would be responsible for implementing the mitigation efforts and the county’s sole responsibility would be to provide half of the funds to cover the costs.
The city will also be solely responsible for the financial costs associated with decommissioning the dam and for complying with “all applicable environmental laws in regulations” associated with it. Lexington has applied for a grant to cover all or part of the decommission efforts, and Lexington City Manager Tom Carroll expects that the city will hear the results of the application in May or early June.
“In the end, I think the critical factor of this agreement is eliminating that liability and threat to the health and safety of our neighbors downstream from that body of water, and I’m glad we could come to terms on that,” Council member Chuck Smith said during Thursday’s discussion. He then made the motion to approve the agreement. Vice-Mayor Marylin Alexander provided the second, and the motion passed in a 6-0 vote.
