Wednesday, August 20, 2014

Water District to conduct cost of service study

Results could lead to first rate increase since April of 1999

J-E News Editor
Webster County Water District board members approved a plan to proceed with a cost of service (COS) study that will allow them to accurately judge where water rates should be.

According to district superintendent Paul Lashbrook, the water district has not increased water rates since April of 1999.
“Everyone around us has raised rates but we haven’t,” Lashbrook said. “The Public Service Commission (PSC) would rather you take small rate increases more often than to take one large increase.”
District officials have followed through with several money saving plans to prevent the need for a rate increase, including making changes to some of the chemicals they use at the water plant in Onton. But recent electric rate increases have hit the district hard.
“We’re not hurting for money right now, but a couple of problems and we could be hurting real quick,” said board member Charles Buchanan.
Lashbrook pointed out that most of the equipment in use at the water plant is nearly 15 years old. At one time the district had more funds on hand that could have been used to replace equipment as it wore out, but as the cost of production went up and rates stayed the same, those funds have dwindled.
“Some of that stuff is about to start wearing out, and it is going to cost us a lot,” Lashbrook told the board.
A cost of service study would take an in-depth look at all of the district’s finances, from chemical and utility costs, to personnel. In the end it would be compared to the rate the district charges customers, and a new rate would be suggested.
Lashbrook suggested Alan Villines of Providence as a person who could handle the COS. He is an engineer and an experienced water operator. The COS will cost the district between $5,000 and $7,500.
“It’s not a requirement that we have an independent study done,” Chairman Jimmy Frederick reminded board members. “We could do an in house study and save some money.”
The concern of the board was the amount of time that had passed since the last rate increase. In order to pass a utility rate increase, the district must submit a detailed study to the PSC. After reviewing the study the PSC will either grant a rate increase or contact the district for more money.
“I’m not knocking the COS,” Frederick added. “I’m just saying we don’t need to spend $7,500 this year and then spend $7,500 in two years for another study. It’s been a long time since we’ve had an increase, so there could be a lot of questions from the PSC.”
“I think if we’re going to raise rates, we need to make sure to do everything the right way and get the independent study,” said Tommy Chandler.
The consensus was to proceed with the independent study this year, but plan to handle such matters in house in the future.
In other business, the district will be holding a surplus auction in order to sell a 2006 Chevy pickup. The truck is a two wheel drive with around 123,000 miles.
The district will also be seeking quotes on repaving the parking lot at their office in Dixon.

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