By Richard Kerns
rkerns@newstribune.info
tribune staff writer
KEYSER — Faced with the pressing need for $9 million in water system improvements, the city of Keyser on Monday hosted a representative of West Virginia American Water to brief the mayor and council on the potential benefits of privatizing the water and sewer systems.
In welcoming Dan Bickerton, business developer for the Huntington-based company, Mayor Glen “Bunk” Shumaker said the city is looking at a number of options regarding the funding of the water system upgrade, the bulk of which involves construction of a new treatment plant.
“We’re just looking at other options, other ways to go,” the mayor said.
That approach fits well with West Virginia American Water, which, although concentrated in the southern part of the state, wants to expand its customer base to help keep costs down.
“That’s really why I’m here today,” Bickerton said. “We’re trying to grow our company.”
Bickerton began his presentation by outlining the history of the company, which has been providing water service to residents of West Virginia since the 1880s. Today West Virginia American Water serves 170,000 water customers in 19 Mountain State counties, and 31 municipalities. The company is part of the larger American Water corporation, which serves 17 million people nationwide.
Much of the discussion during the hour-long meeting involved the company’s recent acquisition of the water and sewer systems in Fayetteville, whose water system is about half the size of Keyser’s. Bickerton said the company was invited to the community after city officials were forced to make system improvements that drove water rates – which had been among the lowest in the state – to levels that were among the highest. “People were very upset, as you can imagine,” Bickerton said.
While an acquisition would normally be expected to take about one year, the Fayetteville transaction was negotiated over three years. When the vote finally went before the people this summer in the form of a referendum — as any acquisition must — it was overwhelmingly approved.
Bickerton said it was far too early to talk any specific figures, although he noted that American Water’s current rate for an average household that uses 3,900 gallons is about $38 a month. Keyser’s average user pays about $27, although city officials fully expect that rate to increase significantly with the cost of the water system upgrade. The target figure most often cited is about $35.
“I don’t know what I can offer you, I don’t know what I can’t,” Bickerton said. “There’s no cookie cutter approach. Each municipality has different issues.”
A common issue in such transactions is the status of current water and sewer employees. Jim Hoffman, the city’s sewer system supervisor, said his workers are watching the issue closely. “All of my men are nervous,” he said.
Bickerton noted that employee status is another item for negotiation, but typically the company retains many current employees, because they are the ones who are knowledgeable about the systems. However, the company may not retain all of the employees, as staffing levels can be higher in the public sector than in a private operation like American Water. With many municipalities, he said, “there tends to be a lot of employees who get paid a very low wage,” he said.
As for those workers who are retained, Bickerton added, “In almost every instance (salary levels have been) at least as good or slightly better” than municipal pay.
Following the presentation, Shumaker said the council members would consider the proposal and likely decide in November whether to proceed further with privatization.
