Journal-Times (Grayson, KY)

September 11, 2013

Rattlesnake Ridge seeks 29% water rate increase

By Joe Lewis - Staff Writer
Journal-Times

Sept. 11, 2013 — Rattlesnake Ridge Water District Monday applied for a substantial rate increase with the Kentucky Public Service Commission.

In a public notice published in today’s issue of the Journal-Times, the district outlined a proposed across-the-board rate increase of 29 percent for all customers.

In a copy of the application obtained online by the Journal-Times, board member Bernie McDaniel claims that Rattlesnake Ridge is not currently bringing in enough revenue to offset its operating expenses.

“The district is currently running a loss. They need a rate increase,” McDaniel in the application.

According to figures presented in the application, the district currently receives $2,022,798 in annual revenue but its expenses total $2,422,206 – leaving a $361,735 operating deficit.

With debt service calculations included in the application, the district predicts it will need a total of $2,609,802 to cover all annual expenses, the reason the board is seeking a rate increase expected to produce an additional $587,004 in revenue.

The application was submitted as an “alternative rate filing” which means the district hopes to have the matter reviewed on a faster than usual timetable.

The PSC, however, has the statutory right to take up to 10 months to make a final decision.

In the meantime, however, Rattlesnake Ridge can implement the new rate schedule. If the rate increase is approved then no further action would be necessary.

But if the PSC only allows only a partial increase, the district would have to refund customers the difference plus interest.

“The board will be discussing this at next month's meeting I assume they will make their decision about implementing the rates at that time,” McDaniel said Tuesday.

Last month the Journal-Times reported that Chris Stamper, the district's former office manager, was fired in June for misappropriation of funds, according to board chairman Bill Gilbert.

A KSP investigation into the matter is ongoing but no indictments have been returned, as of Tuesday.

According to McDaniel, the matter of financial mismanagement is not connected to the proposed rate hike.

“The amount involved in that issue is so little that it has no bearing when it comes what we're asking for with the new rates. The fact is that our expenses keep going up but the rates haven't,” said McDaniel.

“This increase has been talked about for almost two years now. It's just bad timing that these two things have come out back-to back.”

According to PSC records, the district’s last rate increase was in 2010.

While no specific timetable has been set for PSC to review the proposal, it could be several months before a ruling is issued.

Rattlesnake Ridge Water District is the largest drinking water provider in Carter County. It purifies water from Grayson Lake for 4,049 customers in Carter, Elliott, Morgan and Lawrence counties.

The utility completed a $6 million expansion project earlier this year to raise its production capacity from 1.6 million gallons to 2.4 million gallons per day.

Organized in 1985, the water district has more than 700 miles of water lines, 10 pump stations and 11 storage tanks.

Joe Lewis can be reached at jlewis@journal-times.com or by telephone at 286-4201.