SALYERSVILLE – Magoffin County Water District is looking to raise their rates for the first time in nearly 10 years, in efforts to combat inflation and losses sustained during the pandemic.
“Technically, we should have done this three years ago, but the pandemic hit, and everything was frozen, so we couldn’t shut off anyone for non-payment or charge a reconnect fee for over two years. We lost $90,000 during the pandemic that we still had to spend but couldn’t recover,” Magoffin County Water District Superintendent Allen McCarty told the Salyersville Independent.
After the restrictions were lifted on utilities, McCarty said they had to have a rate study conducted, which takes around a year to complete and recently came back from the Kentucky Rural Water Association.
“One thing you have to remember is we don’t set the rates: the PSC does,” McCarty said. “We have to do a rate study, and that’s what we just got back, and the rate study suggests these numbers and we send those to the PSC. We advertise that we are filing an application of a proposed rate increase, but the PSC will review the rate study and rule on it. Then, the water board will vote to raise the rates per the PSC’s ruling, but can decide whether to increase the rates all at once, or over a span of up to three years.”
The Kentucky Rural Water Association proposed an increase of more than 41% across the board, as laid out in their legal ad on page B5 of this week’s paper, and the Public Service Commission will review those numbers and rule on what the rates should actually be (could be more or less than the proposed rates in the rate study).
While they cannot set the rates, the board vote on how quickly to institute the increase. With the last rate increase 10 years ago, the board decided to stretch the change across two years in an effort to not negatively impact anyone too much at one time, with McCarty explaining he would expect this increase to span two or three years (three is the maximum allowed for rate increases), and would equate to only a dollar or two more per bill each year.
The ad gives an example of a monthly water bill for a customer using an average of 4,000 gallons per month, which would increase from $36.11 to $51, or by 41.24%. If spread out over a three-year period, hypothetically, that would mean for the first year the monthly bill would be roughly $41.08, the second year $46.04, and the third year $51.
The county water district is also looking to increase their non-reoccurring charge for setting a new meter from $600 to $1,200 (ad on page B4), but that only includes when a customer needs a new meter set, not just moving to another location that already has a meter, McCarty explained.
“With inflation and everything, it costs us $800 just in parts for a new meter, and that’s just if we can get the parts, and doesn’t include the manpower and other things we may have to do,” McCarty said. “Some meters may take two hours to set, and others can take up to two days, but the average takes around four to five hours.”
McCarty said the water districts costs have increased by one-third across the board, from gas, to all materials, which usually have to be either brass or copper, and the district runs solely on the money it makes.
“All of our costs have gone up, but we’ve had to take in less revenue due to the pandemic,” McCarty said. “We try our best to keep the rates as low as possible, and we’re lower than most around us, but we just ask the community to be patient and understanding as we move forward with whatever the PSC rules.”
According to the advertisement, the county water district plans to file an application with the Kentucky Public Service Commission on August 24, seeking approval of a proposed adjustment to the water rates. The ad ran last week and will continue to be in the SI through this week and next, with the public able to submit comments or a timely written request for intervention to the Public Service Commission, PO Box 615, Frankfort KY 40602. People may also submit comments on the PSC website or by calling 502-564-3940.
The SI also looked back at the last three years’ audits for the Magoffin County Water District, with the only finding on any of the audits being a lack of segregation of duties, which is a pretty common finding in small communities and had been corrected by the December 2022 audit, all available at https://psc.ky.gov/WebNet/ListLibrary/ADT.
As this situation continues through the PSC-regulated process, the SI will continue to release information as it becomes available, though a rate change is expected to take several months before it can go into effect.
