By Richard Kerns
rkerns@newstribune.info
tribune staff writer

KEYSER — An accounting firm retained by the city of Keyser is recommending that the city's water rates be increased 50 percent to cover operating expenses and fund loans for the first phase of an $11.5 million water system improvement project, but Mayor William “Sonny” Rhodes is insisting that at least some of the project-related costs be borne as well by outside customers in New Creek and McCoole, Md.
Representatives of all three water systems met Thursday afternoon at Keyser City Hall to review the proposed funding plan for the project, which will involve replacement of the city's water storage tank, extension of lines to Hollywood Road, and replacement of an aging water main along Limestone Road. Phase two of the project involves reconstruction of the water treatment plant.
Jack Miller of the accounting firm Griffith and Associates made it clear at the outset of the meeting that Keyser's water rates are artificially low after years without any upward adjustments, and that they will have to be raised regardless of the project.
“I think the city rates need to increase anyway,” Miller said. “But there's no way in the world to do this project without an increase.”
City officials noted that a 50 percent increase would only apply to water use, and not sewer charges. For a resident who pays the minimum rate of $12.64, such an increase would raise the monthly charge to $18.96.
“If your water bill goes $30 a month, it would be $45,” with a 50 percent increase, said Butch Keister, water treatment plant supervisor.
The first phase of the project will
cost about $4.1 million. Because the city's rates are so low, all of the funding provided to the city through the Rural Utility Services would be in the form of a loan. City officials hope to secure a combination of grants and loans for the second phase.
Miller recommended that the entire 50 percent rate increase be limited to city residents because work under phase one primarily benefits the city's water system. Representatives of New Creek and McCoole, two outlying communities that receive their water from Keyser and are known as “resellers” welcomed that assessment.
“That would seem appropriate since the resellers don't benefit from phase one,” Miller said.
The consensus at the meeting appeared to be moving in that direction until Mayor Rhodes arrived at the meeting about 20 minutes after it started, coming straight to City Hall following a doctor's appointment in Hagerstown. He flatly rejected any funding plan that did not shift at least a portion of phase one costs to the outside users.
“I'm elected by the citizens of Keyser, not New Creek or McCoole,” he said. “That's not treating Keyser residents right.”
New Creek and McCoole representatives, noting the discussion that had occurred prior to the mayor's arrival, said they had no problem sharing in the costs of phase two, as they would directly benefit from the new water treatment plant, which is needed to bring the facility into compliance with the latest government standards for drinking water.
“We don't argue with the plant,” said Bob Amtower of the New Creek Water Association.
Rhodes didn't accept that rationale, insisting that “phase two can't happen without phase one.”
“There's no way that I agree that Keyser gets 50 percent and they get nothing,” he said tersely.
Following further discussion, engineering experts at the meeting indicated that the two phases are independent of each other, and that the water treatment plant could be completed before the phase one work. Phase two was broken off to be completed later in part to make the funding package simpler, and because it is a more complicated project and will take longer to design.
However, the experts also noted that the water tank at Potomac State College is old,  has limited capacity and “could blow at any time.” It would not make sense to invest $7.4 million into a new treatment plant, they indicated, and not replace the water tank.
Fred Hypes of Dunn Engineers made a crucial distinction in noting that two-thirds of the expense related to the phase-one work – the Limestone line replacement and extension of lines to Hollywood Road – “can be classified as purely city.” In other words, users in McCoole and New Creek do not benefit from that work.
However, Hypes said one-third of the $4.1 million project cost is related to the water tank, from which all customers draw, including New Creek and McCoole. “There is an argument to be made there there is a benefit from that” for the outside users, he said.
With representatives of both outside water companies saying they were willing to accept a fair share of water system costs, the meeting gradually moved back to what Councilman Dave Sowers termed “a happy medium.”
At Hypes' suggestion, Miller will revisit the figures related to phase one, and break out cost sharing that spreads expenses related to the tank replacement to both Keyser users and the outside systems, but reserves for Keyser users alone any increases related to the rest of the project — as well as operational expenses that are not covered under the current low rates.
The three groups will return to City Hall at 4 p.m., Monday, Nov. 2 to consider possible rate hikes based on those adjusted calculations.