Sewer system still behind repaying bonds
The Warm Springs Public Service District is $112,239 behind in bond payments to the state’s Municipal Bond Commission.
“We are just a couple of months behind in our monthly payments,” said Rodney Hovermale, district manager of the county sewer system. “We are keeping up with our operating expenses, but lagging behind with the bond payments.”
Hovermale said some of the bonds date back as far as 1977 for improvements made to the Warm Springs sewer system over the years.
The total amount owed on bonds is $14.5 million. The district is not due to start payments on one of the bonds until 2018, Hovermale said.
Most of the money left to be repaid is for the upgrade of the Berkeley Springs sewer plant in 2007, he said.
Customer base declining
“Actually, the customer base has been declining for a couple of years now,” Hovermale said.
He blamed the weak economy for the reason that the district is behind on bond payments.
“The water moratorium affected things for a little while, but since then the economy has been the one,” he said.
Since the partial lifting of the town’s moratorium on new water taps last year, Warm Springs has had very few requests for new service, he said.
Rate increases denied
The West Virginia Public Service Commission has twice denied Warm Springs’ requests for rate increases, most recently last August.
At that time, a request for a rate hike of 3.2%, and a temporary surcharge of 43-cents per thousand gallons to make up the deficiency in bond payments, was denied by Administrative Law Judge Meyishi Blair.
Blair disagreed with the figures used by Warm Springs officials to justify the rate hike and questioned some expenditures.
The district appealed the judge’s decision in September.
Asked if another rate increase request was forthcoming, Hovermale said they didn’t yet have a decision on the latest appeal.
“The biggest problem with rate making in West Virginia is by the time you get a rate increase, you are in a hole, and they don’t allow what you are in the hole for to be factored into what you need,” Hovermale said.
Contract on hold
In February, at the same time the Morgan County Commission was considering a new appointment to the district’s board, Hovermale requested a five-year employment contract.
The county commissioners appointed Joyce Altomare to the board to replace longtime board member Andy Jurick whose term had expired.
The new board has decided to put off any discussion of a contract for Hovermale until the bond payments are caught up.