KEYSER — The city of Keyser is poised to impose a 30 percent water-rate increase on city residents and customers of its water system who reside in New Creek and McCoole, Md.
The across-the-board rate increase would help fund the first phase of a two-phase, $11 million water system improvement project. A follow-up rate increase for the second phase could tack another 25 percent increase on water rates within two to three years.
Briefing representatives of the New Creek and McCoole water systems at a Thursday-afternoon meeting in City Hall, Keyser officials said the rate increase not only will help pay for the improvement project, but makes up for the lack of any increases over the past decade.
“The rate increase is not solely due to the project cost,” said Fred Hypes of Dunn Enginnering, which has been retained by the city to design the water system improvements. “Project or no, there would have to be some increase.”
Still, the city did not receive a ringing endorsement of the rate increase. A followup meeting was tentatively set for later this month to take comments on the proposed increase. If adopted, the increase would take effect within two to three months.
City officials are concerned that either of the two outside or “resale” users may protest the proposed increase to the West Virginia Public Service Commission, which would delay adoption of the new rates, and possibly delay the project itself.
At just over $4 million, the first phase of the project would relocate and replace the system's main water tank, now located in the heart of the Potomac State College campus. The aging tank has leaked in recent years, and relocation of a new tank to a higher, more remote part of the college campus would boost pressure for some higher-elevation Keyser residents, and also expand the system's water-storage capacity.
McCoole and New Creek residents in past meetings have generally accepted that their customers benefit from the water tank, and would be agreeable to sharing in that part of the project, which accounts for about half of the phase one cost.
However, phase one also includes replacement of a century-old water line along Limestone Road, and extension of Keyser water service to about three dozen homes on Hollywood Road, located off Limestone.
Norm Launi of the New Creek Water System questioned why New Creek's 1,300 customers should be asked to pay for the non-water tank work, and hinted that the other two parts of the project could form the basis of a PSC appeal.
“There's no way you can justify us being part of that,” he said. “We would get nothing out of that. That's a basis for a protest right there.”
Mark Yoder of Allegany County government, representing McCoole customers, also questioned the 30 percent increase. He said McCoole customers would prefer relatively minimal increases of 3 or 4 percent a year, rather than 30 percent all at once.
Keyser Councilman Dave Sowers attributed the large increase to the failure of past city administrations to do just that, saying it was politically unpopular to increase rates regularly. As a result, the last increase was in 2001, and was for 5 percent or less. City officials said the rate increase prior to that was another 10 years or so earlier.
In proposing the 30 percent rate increase, which was developed by a Charleston accounting firm retained by the city to help arrange financing for the project, officials noted that Keyser water remains a relative bargain, with city rates in the bottom one-third of water systems statewide.
Jack Miller, of the accounting firm Griffith and Associates, noted that outside users pay less for their water than residents of Keyser. According to Miller, the resale rate charged to New Creek and McCoole is $2.23 per 1,000 gallons, while the cheapest rate available to city users is $2.83. With the proposed increase, he said, New Creek and McCoole would be paying $2.89, while the cheapest rate in Keyser would be $3.68.
“Normally, they're pretty much in the same ballpark,” Miller said of water rates charged to municipal residents and outside users. “There's a lot of disparity there.”
Keyser Mayor William Sonny Rhodes said he would not be surprised if a protest is lodged, but he cautioned the outside users against doing so. If the case were to go to the PSC, he said, the regulatory agency could come back with a higher rate still, to make up the difference that Miller noted.
“If you go to the PSC, they might increase it,” he said.
Phase two of the project will cost about $7 million and will involve construction of a new water treatment plant to replace the aging facility on Water Street. Grant funding will be provided to help pay for that part of the project, whereas all of phase one is being paid for through a loan. While an additional rate hike will be needed to help pay for that part of the project as well, it would not be adopted for another two to three years, after the new plant is operational.
Mayor Rhodes encouraged the New Creek and McCoole representatives to carefully consider the plan and convey any concerns. The goal, he said, is to resolve any differences without having to go to the PSC.
Keyser, W.Va. —
