The sewer system there is no longer capable of handling the capacity that is currently required of it. Consequently, during times of heavy rainfall, excess sewage is leaking into the Cumberland River.
To fund the project the sewer utility, which ended the last fiscal year with a deficit, is prepared to accept $1,703,000 from the American Recovery and Reinvestment Act, though only 52.1 percent of the needed assets would be given to the city as a grant. Should the proposal be approved, a hardship loan will cover the remaining 47.9 percent, at an interest rate of one percent. The decision to recommend acceptance of the funds and begin the project came after thorough discussion among the commission.
In order to pay off the loan, sewer rates for Pineville city residents, totaling about 840 customers, must increase. Board members were uneasy with accepting the rise in cost to customers, and spent two sessions discussing all possible options. Currently, the ARRA grant is the only one available to the utility and the loan carries the cheapest interest rate it can expect to receive from any source. Members explored all other solutions to prevent the hike, but concluded that accepting the grant and loan and beginning the project as soon as possible will be the least costly option to consumers.
Since the Environmental Protection Agency will begin fining the city if the problem is not corrected, taking no action is not a feasible option. There are currently three violations created by the inefficiencies on Kentucky Avenue, and each carry a $1,000 penalty. This means that failure to act will cost the Pineville sewer utility $3,000 per day. Add that cost to the price of the corrective construction, minus the stimulus money which carries a timeframe for acceptance, and without it residents could be in much deeper financially. The Commonwealth of Kentucky and the EPA may mandate consumer rate increases to cover costs of fines and system corrections, and ultimately those rates would be much higher than those residents are facing now.
The provisions of the American Recovery and Reinvestment Act stipulate a timeframe for rate increases and repayment of the loan. The first of the three increases is unfortunately the highest and would become effective October 1, 2009. If the funds are accepted, customers will see a rise of 70 percent from their current rates. The next increase of 15 percent would come July 1 of 2010 with another 15 percent being added the following July. Currently the average sewer bill is $17.18, this means that beginning in October the average bill could rise to $29.21 and by summer of 2011 to $34.36.
Once upgrades are complete and the loan is repaid, if the utility is taking in excess revenue it can ask permission of bond holders to decrease rates. If possible, members are prepared to ask for a price reduction when the time comes. The acceptance of the monies and plans to begin improvements have now been recommended for approval to the city council, but the Council has not yet met to discuss the issue.
Lorie Settles is a correspondent for The Daily News. She can be contacted by e-mail at editor@middlesborodailynews.com
It looks like the board gave every option fair consideration before coming to the decision.
I don't live there anymore but still keep a eye on the state of the state, county and towns. It looks like a situation that no longer can be covered over and forgotten especially if EPA and other authorities will be concerned with the Cumberland River. To end this paragraph, I don't think anyone back home would want to deal with the cost of my monthly sewer and water bill.