PSA raises utility rates

HILLSVILLE — Carroll can't afford not to raise its water rates, because otherwise it would lose its eligibility for federal grants, Public Service Authority members discussed at their Aug. 11 meeting.

After a public hearing where no one spoke, authority members approved water and sewer rate increases. One member said he did so "reluctantly."

After the lack of public input, Chairman David Hutchins asked if the rate question was a matter they wanted to act upon or continue to consider.

He quickly added that he had a new understanding about the need for rate increases after a meeting between authority officials and representatives of Rural Development.

PSA Director of Operations Ray Hill had proposed a dollar increase in the residential water and sewer rates, the chairman recalled. The proposal met with some reticence from PSA members.

He noted that Tom Littrell, an authority member, has said “we should not place that burden” with taxpayers.

But after meeting with the Rural Development officials, the chairman learned that to be eligible for federal grants the authority's rates "have to be within a certain boundary" for its residential services.

At the current rates, the authority falls under that grant threshold, Hutchins added. Adding a dollar to just commercial rates wouldn't do anything in that respect, because that's not a factor in the way the federal agency does its computations.

The residential rates need to be $38.25 per month at a minimum for 5,000 gallon customers, officials agreed. This proposal would increase the monthly water rate from $21 to $22.

Hutchins said the county could be eligible for a $1 million grant, if the rates were raised.

That's important for places like Fancy Gap, where the authority is trying to provide water and sewer systems to promote growth and development, said Ronald Newman, the authority's executive director.

"We can either include ourselves into that eligibility or we can exclude ourselves, and raising other rates doesn't help it," Hutchins added. "I'm opposed to putting it on the backs of the residential customers. Unfortunately, that's the way they do the calculations."

The way Newman understood the conversation, if a project took place in only one magisterial district, the federal officials would consider the local going water rate in that district.

If a project is countywide, like the regional water project, which will serve just about every water system in Carroll except Cana and Tower Road, the federal agency would consider the countywide rates, Newman said.

Authority member Sam Dickson asked if it would be possible to raise the rates only 75 cents.

That wouldn't be enough to qualify for grants, Newman answered.

"That proposed rate increase, I think, would get us grant-eligible for the regional line," said Hill. "There's a possibility of a million dollar grant on that project."

Authority member Wes Hurst made a motion to approve the rate increase as advertised.

"It is some increase on the people of the county... but what it costs to do business now is very expensive," he said. "If we don't work on it now, then someday we'll have to come with a larger increase than this.

"So is it better for us to come back one day and have a larger increase?"

Hurst would also hate to see the loss of grant eligibility.

All authority members voted yes on the motion, though Littrell said he did so reluctantly.

The motion was approved unanimously.

"I really hated to do the rate increase today," Littrell later said during the meeting.

He'd had citizens call him with concerns about that, and Littrell had made up his mind not to go along with it.

"A dollar doesn't mean much to some of us, but it means a lot to others," he said.

Looking at the big picture — losing big grants — Littrell felt that it was necessary to go ahead with the increase, even though he wasn't happy about it.