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PSA mulls rate hike
Friday, March 15, 2013
By DEBBIE HALL - Bulletin Staff Writer
Henry County Public Service Authority customers may see a rate increase — the first in seven years — in the coming fiscal year.
The PSA board will discuss the issue during its meeting at 6 p.m. Monday in the fourth floor conference room of the Henry County Administration Building.
Tim Hall, the Henry County administrator and general manager of the PSA, said he will recommend that the board vote Monday to advertise the public hearing that is required for a rate hike.
If the increases are approved, Hall said PSA staff will ask for them to start June 1.
“We bill a month behind, and that would allow us to start” receiving the increase on July 1, he added.
The PSA board commissioned a rate study by Draper Aden Associates of Charlottesville in October.
The recommendations, presented to the PSA board in February, include increasing residential water and sewer rates by $4 to $30 for the base use of 4,000 gallons of water and to $30 for 4,000 gallons of sewer per month, Hall said.
That means residential customers would pay a minimum of $60 a month for 4,000 gallons (or less) use of water and sewer rather than the current combined water/sewer monthly rate of $52 ($26 for each water and sewer), Hall said.
Water and sewer rates are the same because sewer is based on water consumption, he added.
In addition, the PSA would charge $4.70 a month for water and $4.70 a month for sewer for each additional 1,000 gallons used over the minimum, an increase of 70 cents each, according to the recommendations. If a customer used 5,000 gallons one month, which is 1,000 gallons over the minimum, that customer would pay $69.40 a month total for water and sewer.
But, Hall said, “more than half of our customers don’t go over” the 4,000 minimum.
Discounts for customers enrolled in the PSA’s senior citizen/disabled program would increase from $5 to $7 per month for water and for sewer. That means their base bill would rise only $2 for each 4,000 gallons of water and sewer service, according to the recommendations.
The PSA has three tiers of customers: residential, commercial and institutional, Hall said.
Under the recommendations, monthly rates for commercial users would increase by $6 each for 4,000 gallons of water and sewer use, with the minimum bill rising from $39 to $45 each for water and sewer, he said.
Rates for institutional customers, such as county and other governmental offices, would increase from the current minimum rate of $59.50 per month each for 6,000 gallons of water and 6,000 gallons of sewer to $68.50 per month each for the same level of use, Hall said.
Those customers also would pay an additional $8.10 for every 1,000 gallons used of water and sewer over the minimum 6,000 gallons, the report stated.
Water and sewer rates were last increased seven years ago, Hall said, adding that those increases were designed to get the PSA through five years.
“Our costs have increased for seven years. We’ve just managed to make changes and streamline” operations so the additional costs would not be passed onto customers, he said.
But “it is getting extremely difficult to absorb any more” increases, he said.
Also, the PSA is required by law to have a mandatory debt-coverage ratio of 20 percent of operating costs, according to a Draper Aden Associates report.
If the PSA fails to maintain that ratio, bondholders can “say we are not meeting the provisions of the bond agreement” and demand payment, Hall said. “We would struggle to make that payment,” and the bondholders would have the option of seizing the PSA and turning it into a profit-making entity, which would “mean your rates could skyrocket,” the report stated.
That is “all theoretical, but we don’t want to get in a position to test that theory,” Hall said.
The report also included recommendations to help customers lower their bills, such as checking toilets for leaks, taking shorter showers and using less water for baths, using dishwashers and washing machines for full loads only and turning off the faucet after wetting toothbrushes or while cleaning vegetables.
To decrease water use outside the home, water lawns only when needed and then during the cool hours of the day. Opt for drought resistant trees and plants that use less water and use a broom, not the water hose, to clean driveways, sidewalks and decks.
For more tips, visit the Soil and Water Conservation Society online at www.swcs.org, or the American Waterworks Association at www.awwa.org.