City, PSDs spar over unpaid bills

© 2018-The Record Delta

City owed nearly $150,000

BUCKHANNON — The accounts of two county public service districts are “severely delinquent,” City of Buckhannon officials revealed recently.

The Hodgesville Public Service District and the Tennerton Public Service District each owe the city more than $60,000 in back payments, city administrative and finance director Amberle Jenkins said at a Sept. 14 Water Board meeting. The City of Buckhannon provides water and/or sewer service to public service districts in the county, which, in turn, provide those services to customers in outlying areas.

According to Jenkins, the Hodgesville PSD has a past due balance of $62,543.29 for water supplied by the city, and the Tennerton PSD has a past due balance of $84,350.69 for municipal sewer service.

Jenkins said she hand-delivered a letter to Terry Gould, manager of both PSDs, requesting that he contact her to arrange a meeting between the city’s water board, the city’s sanitary board and the board of directors of both PSDs.

In an interview, Gould said the PSDs plan to pay back the city, but he also took issue with rate increases and other operations within the city, such as asking the water and sewer boards to pay for the new public information officer/grant writer position.

At the Sept. 14 water board meeting, mayor David McCauley read the letter Jenkins sent to Gould.

“In the spirit of transparency, we’ll go ahead and read it,” McCauley said. “We’ve been battling this for years.”

The letter informs Gould that both accounts are “severely delinquent.”

“We have been patient in allowing you to try to resolve the matter, but the balances are becoming so large, it is beginning to affect our balances as well,” the letter states. “Normally, service for a delinquent customer at this point would have already been terminated; however, you are a public service district and we realize you serve a few thousand people and this would put them at risk.”

The letter asks Gould to cooperate in scheduling a meeting with the city boards. Jenkins said while residents served by both PSDs are not at risk of the city cutting off their water or sewer service, she has contacted the West Virginia Public Service Commission to find out what “recourse” the city has if Gould does not comply with requests to meet with the city boards. The PSC informed Jenkins the city could file a formal complaint against the PSDs but encouraged her to attempt to iron out a solution with Gould. 

“Once you file a formal complaint, they (PSC officials) come in and do an investigation,” Jenkins said at the meeting.

Karen Hall, a public information specialist for the PSC, said Buckhannon does have the option of filing a complaint.

“If they file a formal complaint, it’s very much like a civil trial in which there would be testimony given by each side and research done by the commission staff, because the commission has engineers and accountants on staff who would go through all of the case and look at all the details,” Hall said Wednesday. “Then, in an evidentiary hearing, all the evidence would be brought before the three commissioners, and then they would make a decision.”

Hall said it’s possible the parties could opt to engage in mediation to reach an appropriate solution.

But the root question is this — why hasn’t the Hodgesville PSD and the Tennerton PSD paid the city?

Gould said the Hodgesville PSD, which serves approximately 1,200 customers, is running behind on its bills due to the deteriorating condition of its aging system.

“Basically, what we’ve got with Hodgesville, is the design life of any (water distribution system) is 40 years, and Hodgesville is right now approaching 40 years old,” Gould said in a telephone interview Tuesday. “We have had leak after leak after leak. We’ve accomplished a good bit, but in 2016, we lost about 50 percent of the water we bought from the city due to main leaks, but we are slowly catching up with the city.

“It’s a constant struggle with a system as old as ours.”

Gould said the Hodgesville PSD is in the process of applying for permission to implement a 30 percent rate increase through the public service commission.

Unlike the situation with the Hodgesville water distribution system, Gould said there’s no long-term problem plaguing the Tennerton PSD that’s preventing it from paying the city for sewer service.

“That’s just a short-term thing,” Gould said. “We’re usually pretty up on it. We’re planning on paying those up; we don’t have a financial problem.”

When asked about the city’s hand-delivered letter highlighting the delinquency of the two accounts, Gould said he’s already asked to enter into a payment plan with the city.

He also expressed frustration with the city.

“I’m not too concerned with the City of Buckhannon,” Gould said. “They keep on passing rate increase after rate increase after rate increase, and now with home rule, they can pass them at will.”

City council is currently contemplating a two-step sewer rate increase ordinance that would increase sewer rates by 10 percent this year and then another 10 percent in 12 months; the first reading of that ordinance was scheduled for Thursday’s regular council meeting. The city also raised sewer rates by 20 percent in August 2016; prior to that, rates last increased August 2010.

Council hiked water rates by 18 percent in August 2015 and by 15 percent in November 2016. Before those hikes, the water rate was increased three years prior, in November 2012, according to Jenkins.

It’s not true that the home rule pilot program under which the city operates enables it to hike rates whenever it wants, however, according to city attorney Tom O’Neill.

“The (rate increases) are divorced from home rule,” O’Neill said Tuesday. “Within the municipality, they (city officials) could always do it (raise rates) on their own because the people were protected by their ability to elect or un-elect city officials. However, generally speaking, the public service commission has some amount of oversight for customers outside municipal limits.”

Hall, the public information specialist with the PSC, said because of its size, Buckhannon qualifies as one of the municipalities that has the authority raise their own rates via ordinance, so long as they file the tariff with the PSC, under Senate Bill 234, passed during the 2015 legislative session. But public service districts existing outside municipal limits — like the Hodgesville PSD and the Tennerton PSD — must file what’s called a “rate case” with the PSC before they’re permitted to raise rates, Hall explained.

Gould also took issue with council’s decision to move forward with instituting a public information specialist/grant writer position that would be partially paid for by the water board.

“That (the new position) has nothing to do with utilities,” Gould said, “and the utility boards shouldn’t have to pay for the compensation for a public relations, grant writer person.”

As previously reported in The Record Delta, council plans to pay the person $30,000 to $35,000 plus benefits and expects to fund the position by securing $9,000-$10,000 from each of its five enterprise funds or boards, including the general fund, the water board, the sanitary/sewer board, the Consolidated Public Works Board and the waste collection board.

Each board must approve funding the position before the city advertises for it.

However, McCauley contended that hiring an information specialist/grant writer would directly benefit utility boards.

“It’s a two-prong thing,” he said Tuesday. “First of all, there will be a lot of grants written to support utility operations, and second, the water, sewage and waste collection boards will benefit because if Buckhannon grows, the utility departments are going to benefit from that (because of an increased customer base), and maybe we won’t have to raise rates.”

As of Wednesday, Jenkins had not yet made contact with Gould regarding setting up a meeting to arrange a payment plan.

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