Infrastructure needs to remain on front burner
Everyone hears about the infrastructure issues in this country – how it’s crumbling, outdated, and in desperate need of fixing. Infrastructure occasionally jumps to the political front burner; when the next simmering hot-button topic moves to the front, infrastructure issues move to the back burner. Shepherdstown is working to stay in the forefront of infrastructure repairs, updates, and mandates-we need to keep it out front, not on the back burner.
That was the general answer to the question: Why will sewer and water rates rise?
Both water and sewer rates will increase as a result of the same reasons: to meet federal and state regulations, and an order from the West Virginia Health Department. In a previous column, I laid out the specific issues of what and why the water project is needed. Now for some dollar-specifics.
The cost for the upgrade the water system is approximately $16.4 million
The cost for the upgrade to sewer system is approximately $9.75 million.
Combined total funds needed – more than $26 million.
Since the Town does not have a handy $26 million, we must borrow the money.
Sewer System Project
Our first source for a loan with a manageable interest rate is from a state agency. But, to qualify for that rate the Town must charge customers a specific formulated rate, which in turn amounts to our ability to repay the loan; not only are the water and sewer systems required by law to upgrade-otherwise known as unfunded mandates-increased rates become a necessity.
The Town Sewer Department upgrade proposal, which has passed both required public readings, is now being reviewed by the West Virginia Public Service Commission (PSC). Once approved, the next objective is finding the money to complete the project.
Qualifying for a $9.75 million loan from the West Virginia Infrastructure & Jobs Development Council at a low-interest rate (0-3 percent), the WVIJDC mandates that the Town charge sewer (and water) customers at one and half percent of the median income of Shepherdstown residents. Like it or not, we have the second highest annual median income of any town in the state – $48,370.
Sewer rates will not only increase to meet the qualifications of the loan, but will also be affected next year when a new census report is completed.
Water System Project
The $16.4 million upgrade to the water system (distribution system improvement, $6.5 million; new storage tanks, $5 million, and water plant upgrade, $4.9 million) is also an unfunded mandate from federal and state governments. (Feb. 20, 2009, Chronicle column posted at under Mayor’s Column.)
Keeping the water and sewer systems operational requires meeting federal and state mandates such as the Chesapeake Bay cleanup and restoration projects, Safe Drinking Water Act, and the state Health Department.
The vicious circle is: to meet those mandates the Town must get a low-interest loan to finance the mandated projects, to get the loan, it must be demonstrated that the Town can repay the loan; to repay the loan, the rates must be increased.
The good dollar-news is a low-interest loan will save money over the period of the loan. But that sounds as a weak try at sugar-coating. The fact is, raising water and sewer rates is painful but necessary.