Sewer bond payment deficiencies questioned

The Warm Springs Public Service District received a letter from attorneys representing the West Virginia Water Development Authority expressing the Authority’s concern about large bond payment deficiencies every month and asking what the District plans to do to “deal with the existing deficiencies and potential future deficiencies.”

The letter dated November 15 from the law offices of Hereford & Riccardi, PLLC in Charleston noted a deficiency of $67,280 for the month of September and similar deficiencies in June, July and August.

The letter asked for a response within 10 days.

District General Manager Rodney Hovermale wrote a response dated November 20. In the letter, Hovermale said he shared their concern but cited several reasons for the deficiencies.

He said the District had filed for a rate increase with the West Virginia Public Service Commission (PSC) in November 2010 along with a surcharge to be dedicated to the bond deficiencies that was later denied.

After the District filed five exceptions, the PSC ultimately agreed with four of the five exceptions and granted a minor rate increase of 0.39% and a 3.45% temporary surcharge on May 12, 2012, with the proceeds to be dedicated to the deficiencies.

The new revenue from the rate increase and surcharge started being collected in August and through October, $9,265 had been forwarded to the bond commission, Hovermale said.

He added the District has reduced operating expenses, but due to 75 fewer customers, revenue has dropped.

Hovermale’s letter concluded the District does not have the funds to conduct another case for a rate increase at this time.

“The surcharge should soon begin to put a dent in the deficiencies. We are diligently trying to keep expenses to a minimum and enhance revenues by collecting a monthly service fee for vacant properties, although this is being protested at the PSC,” Hovermale wrote.