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Moundsville City Council Set to Vote on Sanitary Board Rate Increase

MOUNDSVILLE — City council will vote on a rate increase for the sanitary board, and municipal leaders want to ensure the public understands the rationale and necessity behind the hike.

At the second November council meeting, council voted to allow City Manager Rick Healy and City Attorney Tom White to draft the ordinance authorizing a 35.4-percent rate increase. Healy explained on Nov. 17 that the sanitary board requested the increase, which would go to a state-mandated capital reserve. The increase would also contribute to a $445,000 manhole replacement invoice, operation and maintenance, and payment for a new pickup truck — replacing a 1998 model.

Healy later said that a report to the city stated that the average Moundsville household, using 4,000 gallons per month, would see its rate increase from $19.06 to $25.35. The city expects to receive an additional $274,000 through the increase. Historically, rate increases have been a frequent target of scrutiny on council, given Moundsville’s aging population, many of whom are on fixed incomes.

Council voted 6-0 to approve drafting the ordinance, which, they repeatedly pointed out, does not equate to voting in favor of the increase. Council member Gene Saunders faced repeated technical difficulties during the Zoom meeting, and his vote was recorded as abstaining.

The ordinance will require three readings, and if passed each time, will be enacted following the Jan. 5 council meeting, the last of which will include a public hearing. Council member Sara Wood said she felt it was important the public attend that meeting and understand the reasons for the rate increase.

“I think the public is going to see a 35-percent increase and not understand why we’re hitting them with that large an increase at this time, if it were to go through,” Wood said. “It needs to be clearly stated to the public that 16 percent of this is state mandated. This is not a choice of council to add that additional percentage.

Wood added that the manhole replacement invoice came as a surprise to council as well, and constituted 10 percent of the rate increase.

“Ten percent is something that was out of our hands, unexpected. Without those two percentages, it would be a much smaller increase. I know nobody is ever in favor of increases, I know people will be upset with this large increase, people would be upset if we chose to raise it every year in incremental levels. There’s no right answer for things like this.”

Council member Ginger DeWitt commented that the sanitary board lumping in funding for purchases at the same time as a pair of large, mandatory rate hikes inflated the number and reflected poorly on the city.

“Maybe if the 26 percent was what they really needed at this time, maybe they should have looked at that and (held) back on the truck, or other issues they had. Thirty-five percent is just absolutely too much an increase to put on the citizens of Moundsville,” she said.

Mayor David Wood pointed out that the cost of the pickup truck represented a 0.8 percent increase at $40,000, and would be “very insignificant” compared to the total amount,

Healy added that 8.6 percent of the increase was for operation and maintenance costs, which gradually increase constantly, such as raises and benefits for city employees.

“We need to consider rate increases on a more regular basis, because the operation and maintenance costs continually increase. We give our employees raises, our benefits increase; this past year, fortunately, health insurance was an extremely minimal increase, but we can’t expect that every year. So we continue to give employees better benefits and higher wages, operation and maintenance costs increase as well…

“That number is not just pulled out of thin air. … That amount is needed to keep them up to date,” Healy said.

Judy Hunt commented that the council could face more significant increases if they failed to pass the ordinance, which would allow external governmental entities to handle the problem for them.

“If we do not make this decision to go ahead with the rate increase, the bond holders will come in and force the public service commission to come and set the rates, and sometimes the rate can be a lot more than what we’re currently proposing,” Hunt said. “I experienced this in the City of Cameron. We proposed a rate of 35 percent at that time, we had a protest from the citizens, and the public service commission came in, audited the books, and once we went through all the public hearings, they came back at a rate increase of 86 percent. That’s a big concern.”

Marc and Mike Abraham, accountants for the sanitary board, said that failure to approve the increase would put the sanitary board below necessary numbers for their bond covenants.

“Based on our bond covenants, we need to have 115 percent debt coverage. Even without the manhole repair, we’re still below our bond covenant, and that’s another thing to point out to the citizens if they ask,” Mike Abraham said.

“Right now, we’ve got covered, according to our analysis, 103 percent, so we’re in violation of our covenant, our contract with the bond (issuer),” Marc Abraham added.

Hunt said that failure to meet those covenants could open the city up to legal action.

“If we do not meet the bond covenant, … that will be an audit finding, and the city will be written up for that, and a letter will be sent to the prosecutor’s office to ask the council how they’re going to correct that issue,” Hunt said.

The city of Moundsville, having created the sanitary board, is ultimately responsible for the board’s legal obligations, the accountants added, answering a question posed by DeWitt as to why the city would face auditing.

“When the city of Moundsville gets audited, it gets audited as a whole. The water and sewer are all together with it,” Mike Abraham said.

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