The West Virginia Public Service Commission (PSC) held a public comment and evidentiary hearing regarding Ronceverte’s proposed water rate hike on Wednesday. Officials and citizens gathered in Ronceverte City Hall this week before the PSC Administrative Law Judge Keith Walker.
Last March, Ronceverte City Council approved a water rate hike resulting in what would be nearly double what customers are paying now. The vote was non-unanimous, with Mayor David Smith and Recorder Crystal Byer joining council members Gail White and Barbara Morgan voting in favor of the rate hike and council members Adam Rosin, Shawn Honaker and Bob Baker voting against.
Following the rate hike approval, Ronceverte citizens signed a petition protesting the rate hike and presented it to the PSC. In turn, the PSC suggested a different rate hike structure.
According to PSC staff attorney Wendy Braswell, the PSC has recommended a two-step rate increase of 32.9 percent for 24 months, dropping down to 20.8 percent after that time, a 12 percent reduction. According to Braswell, the initial rate hike will allow the city to create a financial cushion in the water fund, which is now required by state law.
Ronceverte officials had hoped for a heftier increase in order to shore up accounts, pay for water line and tank repairs, cover future expenses and refurbish the city water fund, which, they say, owes around $800,000 to the city’s general fund.
Ronceverte city attorney Susan J. Riggs told Walker on Wednesday that the city would accept the PSC’s two-step rate recommendation, but asked that an additional amount be charged to water customers to help repay the general fund.
During the public comment period, Ronceverte citizen Ronald Baker spoke out against the rate hikes. “Ronceverte has become a town of elderly people surviving solely on social security,” he said, adding that the majority of younger citizens are families with minimum-wage and part-time jobs.
Coupling the water rate increase with the recently enacted sewer rate increase, put in place to help cover the construction of a new sewer plant, will create undue financial hardship on the town’s citizens, Ronald Baker said.
Citizen Betty Waugh agreed. Noting she collected signatures on the petition that was presented to the PSC, Waugh stated that people simply can’t afford to pay any more. “People don’t have the money. There was no social security raise this year; Medicare went up. It would break your heart to hear the senior citizens,” she said.
After public comment, the hearing proceeded into the evidentiary portion, where Riggs argued that the PSC should allow the city to tack on an additional rate increase to the one recommended by the PSC in order to repay the money the water fund owes to the city’s general fund.
According to Michael Griffith, whose company Griffith and Associates provides accounting services to the city of Ronceverte, the water department has had to borrow money from the general fund to keep the water running. According to the state-approved financial audit of fiscal year 2014-15, Walker said that the water fund owed the general fund $779,358 as of June 20, 2015.
Without funding for the water department to pay back the city coffers, the city may be unable to get an affordable loan for needed upgrades to the city water system, which has corroded lines and needs two new water tanks. Further, he said, the general fund would be “devastated.”
Griffith proposed two options to the PSC: either a $10 per month customer surcharge for 5.3 years or a 17.8 percent water rate increase, based on usage, over the same period of time.
PSC Utilities Analyst Manager David Pauley, whose department oversees rate increases and city accounting practices, argued against the additional fee, stating that the water fund debt documentation is lacking in the city’s financial records, indicating that trash fund and sewer fund debts may have been transferred to the water fund over the years, since 2004.
“I don’t feel this is an accurate way to portray a debt that has, in my opinion, already been paid by citizens and customers,” Pauley said. “If it was me (as a Ronceverte utility customer), I’d be looking for a decrease in my other rates, but the city has indicated that it won’t be the case.”
Further, Pauley said that the PSC has a long-standing policy against retroactive rate increases to cover past losses. “Rate increases are supposed to pay for current use and expansion,” he said.
The PSC administrative judge’s ruling is due July 20.