Lubeck PSD defends surcharges to pay for projects

WASHINGTON, W.Va.- After a public meeting in Belleville found more than 100 people interested in a waterline extension from the Lubeck Public Service District, state officials have said they don’t like part of the plan to pay for the work.

Randy Atkinson, manager of the Lubeck Public Service District, said during Thursday’s meeting of the district that despite the stated willingness of people in Belleville to pay a surcharge on their water bills, state Public Service Commission representatives said they do not like the plan.

“They don’t like surcharges and don’t like our rate structure because the projects involved bonds and loans and grants,” Atkinson said. “Because of the way we have done this in the past, we have been able to make sure we have cash flow to cover costs of improvements.

“We put the surcharge on the bill for those who will benefit from the project, which seems equitable to the board.”

Atkinson said surcharges are how many public utilities pay for improvements.

“It’s not the way the Rural Utility Service and the Public Service Commission like it done; they want to see the cost distributed among the base,” he said.

Atkinson said the district applied for a Small Cities Block Grant for the Belleville water project, but that funding has dried up so they went back to the Infrastructure and Jobs Development Council.

“They had some funds for the first district so we could grandfather the application to secure funding at 100 percent with bonds and grants; we just have to wait,” he said. “We have done this before on other projects. Many (districts) adjust rates but that becomes a little more difficult to sell to the base customers when you raise their rates to help other areas, but that’s the way the PSC likes it done.”

Lubeck PSD Commissioner John Sines said district officials fear the state may use the surcharge against them in the future.

“We have it on different projects done in the past,” he said. “What they are wanting us to do is remove those surcharges from all the projects and spread them out over the entire district.”

Sines said Belleville may be the last large project for the district. He said future projects may be short lines across other areas.

Atkinson said the surcharge in Belleville is projected to be $5.25 per 1,000 gallons of usage. He said the Belleville project may add 200 or more customers for the Lubeck PSD, which has more than 5,000 customers.

Atkinson said the district will still use the surcharges.

“We have not been told we cannot do this,” Atkinson said. “They used terms like ‘gives us heartburn’ and made it clear this was something they tolerated but did not really like it.”

Commissioner Roger Martin said the customers realize the projects increase property values and they see the surcharges as the fair way to make those improvements possible.

Commissioner Jerry Martin said district officials fear the state may try to force the Lubeck PSD to abandon the surcharges.

“They may try to pressure us to change that but we will stay with it,” he said.

Phil Postlewait, accountant for the district, said the meeting in Belleville showed the surcharges are not unwanted by potential customers. He said more than 100 people signed a petition at the meeting for the project. The community building was filled to capacity.

“At the public meeting they said they wanted the service and were willing to pay the surcharge to bring the service to their door,” he said. “When you balance that against having to drive somewhere to haul water and how much electricity it takes to run your own pumps, it costs less.”

Postlewait said the district has used surcharges on bills since 1997 with the Hope Hill/Missouri Run project. The surcharges stay on the bill until the bonds or loans are repaid.