Wood County Commission seeks PSD input on rate increases
PARKERSBURG — The Wood County Commission is seeking information from public service districts wanting the commission to approve rate increases.
The commission met Monday with West Virginia Public Service Commission Chairwoman Charlotte Lane and General Counsel Jessica Lane.
A few years ago legislation was passed that put rate control of the rates of PSDs in the hands of the county commission, which have included Lubeck PSD and Claywood Park PSD in Wood County.
The commission has dealt with rate increases for both organizations.
Lubeck PSD is now asking for a rate increase of 11.53 for sewer and 8.25 for water. A public hearing will be set soon to consider the matter with a 45 day time frame from the request which was done in late July and could be taken up after Labor Day in September. The commission could extend that timeframe if need be.
The commission could take no action and the rate increases would go into effect automatically, Commissioner Robert Tebay said.
“We have to take this up on behalf of the residents and we have to discuss it,” Commission President Blair Couch said.
The commission was looking for some guidance. When the PSC did rate changes, it was a lengthy and expensive process for the PSDs, county officials said.
Commissioners have said they do not have a complete understanding of the process and have had to find their way in considering these increases in the past.
“Being lay people who haven’t even served on a PSD, we tried to ask good questions, but we don’t always know what questions to ask,” Couch said.
Part of the increase was to have a working fund, approved by state legislators, to have money available in a Rainy Day fund for specific projects and needs that came up from time to time.
Couch said they thought the fund could be built up over time and did not need to be in place immediately. However, now he is under the impression the PSDs feel they need to spend the money in those accounts and rebuild it every year.
The fund is supposed to have 1/8th of its annual operation and maintenance costs in it, officials said.
“That is supposed to be set aside and only used for extraordinary expenses,” Charlotte Lane said. “They are not suppose to use that for day to day operations, that is for something extraordinary that comes up.”
The commission could ask the PSDs for an expenditure list for that fund, she said.
“They don’t kill us with a lot of information,” Couch said. “We will have to ask for information.”
Commissioners said the county was not in a financial position to hire an accountant to review the PSDs books on an annual basis.
There has been talk at the state level of giving rate control over all PSDs to the counties.
Couch said the idea has been discussed about consolidating all five of the county’s PSDs into one body as a manager at one makes over $100,000 a year while another only makes over $60,000 a year. Some PSDs have equipment that others have to rent or lease to do certain work.
“If we combined them all, we would probably have a savings,” Couch said.
Commissioner Jimmy Colombo said one of the complaints they always hear is that the officials at the PSDs are paid too much.
“We just don’t know if we can effectively approach this,” he said of some of the considerations they have to do.
In the past PSD officials have said consolidation would be hard to accomplish with the bonds specifically tied to each individual PSD they have outstanding, officials said.
There are other PSDs in the county who contract with others for services, but their boards still meet on a regular basis and people are being paid to do those meetings. Commissioners said it would be a good idea to consolidate those.
In the past, when considering rate increases the commission has also asked for steps the PSDs have taken in cutting expenses and control spending as well as information about how they cover the insurance costs for their employees.
Couch said they have not always gotten good answers.
Lubeck PSD Attorney Blaine Myers, who attended the meeting, asked Couch about the information with which they weren’t satisfied.
Couch said they would discuss it at a later time when the commission takes up the matter.
“I am sorry to have interrupted you,” Myers said before he left the room.
At the time the legislation was passed in 2014 giving the commissions control over some of the PSDs rates, Charlotte Lane said county commissions did not want to set the rates for PSDs in their own backyards and on their neighbors.
“The commissioners do not have the personnel or the money to try to analyze all of these rates,” she said.
Jessica Lane provided the commission with information about what the PSC looks at when considering rate cases.
When looking at rates, PSDs have to look at having money to cover its capital costs, money to cover O&M (operation and maintenance) costs, cover taxes and have its cash reserve, Charlotte Lane said.
At a minimum, the PSDs need to supply the commission with what their capital costs are, what their operational and maintenance expenses are over the past year, what they are paying in taxes and what they pay their employees.
“What are they spending their money on,” Charlotte Lane said.
Tebay, who lives in the Lubeck PSD’s coverage area, said the PSD has had pumps go out that had to be replaced or rebuilt in considering rate increases.
Charlotte Lane said PSDs do need money to be able to operate and serve its customers.
“You don’t want to shortchange them,” she said. “It is expensive to run a utility.
“All of these expenses they have, all the equipment they have running, new equipment and such, they do need that. It is important they have money on-hand to provide all of that.”
Brett Dunlap can be reached at firstname.lastname@example.org