PINEVILLE - At a special called meeting on Tuesday night, the Pineville Utility Commission voted unanimously to send a proposed increase of water rates to the Pineville City Council for approval.

Carryn Lee of the Kentucky Rural Water Association proposed a budget increase to the council based on her research of the utility's current financial state. Lee has worked for many years evaluating small utility companies and making recommendations on rate increases. Lee and Pineville Utility Company's manager Bill Bunch discussed phasing in the rate increase over a three-year period with the largest increase in the first year.

Bunch addressed the “phasing-in” of the rate increase, “We first discussed going for everything at one time, but what I heard from the council informally is, ‘We don't want to do it that way, we want to do a phased thing.' So we then started looking at spreading the mark-up out over a three-year period.” Lee reported to the Commission that the average household uses approximately 5,000 gallons of water per month. Customers are currently being charged $16.10 for that average usage. With the proposed rate increase, at the end of the three-year period, a bill for 5,000 gallons of water would be $30.18.

Lee recommended that the board “go with these numbers (the proposed rate increase/budget).” Lee said to the board, “With Kentucky American phasing out, large companies can usually do it a little bit cheaper than you can. I would go with these numbers because it's my experience that your numbers will have to go up a little bit after you start to run it yourselves.” American Water's contract with Pineville Utility Company ends this year, at which point the City will resume control of the Utility company.

Bunch agreed with Lee's recommendation, stressing to the board that, “The methodology that Carryn has used is accepted methodology in the water industry. By the book, this is what it comes down to.”

Raymond Woods, board member, made the following comment: “The company has got to make ends meet. We have to bite the bullet and hope the council will too. It's not a pleasant thing to raise rates, but it's not a pleasant thing to see a place barely making ends meet.”

According to Bunch, the Pineville Utility Company is experiencing quite the financial strain. With recent projects throughout the region and rising overhead costs, the water company is barely keeping its head above water.

Brandy L. Murray is a Staff Writer for the Middlesboro Daily News. She can be reached via e-mail at editor@middlesborodailynews.com.