“There’s a chance no one would have caught it...,” said Bunch. “It was a luck of the draw.”
To prevent that increase in sewer rates, Bunch, along with Pineville Mayor Sherwin Rader and Judge Executive Albey Brock, met recently with the Kentucky Infrastructure Authority (KIA) in a conference call to discuss ways to solve the problem.
The KIA is requiring the city to raise its sewer rates by 70 percent in order to pay for massive renovation to an environmentally unfriendly sewer system, which now is combined with the storm drainage system and leaks sewage into the river. The makeover will be paid for by an over $1,700,000 in federal stimulus loans received this year, but half of that has to be paid back to the KIA with interest.
The officials discussed with the KIA to consider combining water utility expenses to the sewer utility, which would reduce the money needed to be paid back because of a stronger bottom line. The KIA entered the data for the new proposal into a spreadsheet in order to calculate the figure of combined utility rates.
And luckily for Pineville...
When Bunch got back to his office, he recreated the spreadsheet and found a half-million dollar mistake.
“That was a half-million less to be used to pay on the debt,” said Bunch.
Bunch said that in the KIA’s defense, they quickly estimated their figures and hopefully would have caught the error themselves after further review.
With the money, the KIA would allow the city to combine water and sewer utility expenses which significantly reduced rates, said Bunch. Combine that with the money Brock moved from the industrial park ($350,000) and several cuts to the Utility Commissions basic operations ($80,000), Bunch predicted the rate increase would rise only in the single digits on water and sewer rates for the next five years.
“That’s something much easier for the customer to deal with in terms of paying bills.”
While Bunch said the cuts to the commission — which included two positions that were being hired, the replacement of pick-up trucks, purchase of an excavator and trailers, and the replacement of a new customer billing system — would only have a minimal affect on their operations.
“That has got us down to a rate increase that the council will find much more palatable,” said Bunch. “We’re trying to come up with a rate increase around $2 on average for a water and sewer bill.”
But he said if they can’t hit that ballpark, there would be more trimming.
“We may have to look for more cuts,” said Bunch. “If necessary, we may have to cut more out of the budget.”
Stephen Woodward is a Staff Writer for the Daily News. He may be contacted at swoodward@middlesborodailynews.com.
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