At his last regular city council meeting as Adairville mayor, Jim Wilkerson reported that the Logan Todd Regional Water Commission (LTRWC) voted to raise its rates at its most recent meeting and offered a suggestion about how the city should handle it.
Wilkerson, who served as the city’s representative on the LTRWC during his time as mayor, said the commission voted to raise the rate by eight cents per 1,000 gallons.
“We know that we’ve got to have more revenue and sell more volume to get that revenue,” Wilkerson said.
LTRWC, which gets its water from the Cumberland River and processes it at a state-of-the-art facility in Guthrie, acts as a wholesaler while the individual water districts and municipalities - including the city of Adairville - act as retailers. All water in Logan County comes from LTRWC.
When LTRWC raises the price for water, the districts and cities must choose whether or not to pass the expense on to customers.
Wilkerson said that the amount of water the commission is selling has been going down, causing a loss in revenue that is necessary for paying the bonds which were responsible for building the water treatment facility.
There is about $55 million still owed on the bonds, the largest of which is $48 million, according to Wilkerson.
The LTRWC looking into possibly refinancing the bonds to save money, but when that didn’t appear possible, they instead chose to raise the rate they charge for water.
Wilkerson suggested that the council go ahead and make a decision on what it would do. His suggestion was to raise the city’s by 10 cents per 1,000 gallons. That would raise the minimum water bill in Adairville from $25.88 to $26.08.
Adairville and other cities and water districts have a couple months to figure out how they are going to address the increase, which goes into effect on March 1, 2013.
“Is 10 cents close enough so that we won’t have to raise it again anytime soon?” Blake said.
Wilkerson said that depended on how much the LTRWC may raise rates in the future.
He added that the eight cent raise may wind up not being enough and the commission’s main bond holder, Rural Development, may come in and force a bigger rate increase in the near future.
If that sounds familiar, it’s because that is what happened three years ago.
The LTRWC was forced to raise its rates by 44 cents per 1,000 gallons in March of 2010 because the bondholders forced their hand.
The Adairville council made no decision on Monday. Next month Donna Blake will be taking over and two new council members will begin serving. It will be up to them to make the decision.