SALYERSVILLE – The Salyersville Water Works Commission met in special session on Monday, May 14, deciding to raise water rates in an attempt to satisfy the stipulations of a possible loan for a new water storage tank.
The commission, comprised of David Gardner, Henry Joseph and Terry Marshall, discussed a recent meeting Gardner and Salyersville Mayor James “Pete” Shepherd had with the Kentucky Infrastructure Authority (KIA) board to determine what they would have to do to get approved for a loan to replace the
Church Street water storage tank, which is over 40 years old and in disrepair.
The KIA staff had previously recommended to the board that they not be granted the project, so Gardner, Shepherd, Representative John Blanton and Joe Tackett met with the board and were ultimately given a chance to fix a few things to get the loan.
The $705,982 loan would include a low-interest rate and 50 percent loan forgiveness.
The KIA has a formula to determine the fiscal viability of an entity. Gardner explained that since there was a hole in the city’s audits (from prior administration) and they had concerns about the size of the storage tank they were proposing.
After explaining the number of gallons sold each month, as well as the fact they don’t have a day’s supply in storage, which is recommended, the board understood the need for the size of the 500,000-gallon tank, Gardner reported.
They also showed the board that they have paid up their old outstanding debts and have a very low percentage of water loss. Also, since the project has already been bid out, the current bids for the tank would be cheaper than any future bids, if they’re not awarded the project.
The KIA told them they would consider Salyersville Water Works for the loan if they could raise annual revenues by $140,000 within three years.
In order to satisfy their stipulations, the commission agreed to raise the water and sewer rates 3 percent annually each January, then an additional 3 percent each July, beginning in 2018.
They also agreed to begin the process to secure and implement a wholesale water rate increase to the Magoffin County Water District with the Public Service Commission’s approval.
The water commission also stated they may consider a change to the water rate increases if they do not receive the KIA loan.
They awarded the bid for the project to Kentucky Glass Lined Systems for $548,325, pending KIA approval.
As for what the new water storage tank would be replacing, the Church Street water tank is over 40 years old and is out of commission.
Shawn Rowe, the superintendent at Salyersville Water Works, said the old tank has leaks and that it would be too expensive to repair. He said if Salyersville were to have a drought or a major fire, they would not have the water on hand to deal with the problem.
Gardner said, in perspective, Martin County was forced to raise their rates 29 percent at one time while their water infrastructure was in disrepair, but this is a needed step to keep that from happening.
SWW has been raising the water rates regularly since 2012, in the aftermath of when they were so behind on bills that AEP threatened to shut off electricity to the plant.