Early in the new year, the cities and water districts of Logan County will have to decide what to do about a 2 percent raise in water price by the Logan Todd Regional Water Commission (LTRWC).
Last month, the LTRWC board voted to raise the price of its water from $3.75 per 1,000 gallons to $3.83 per 1,000 gallons.
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.
The city of Russellville was the first to make a decision last week when the city council voted not to pass on the added expense to its water customers.
The cities of Auburn, Adairville and Lewisburg and the North Logan, South Logan and East Logan water districts will all have to decide what they are going to do as well.
The raise in rates became necessary because the LTRWC is not selling as much water as it did in recent years.
“As we have looked at our budget, we have held our expenses as tightly as possible,” said LTRWC board treasurer and secretary Sandra Walton said. “Even the auditor was quite complimentary of that. We were still spending very closely to what we were spending in the previous year.”
The 2 percent rate increase will go into effect on March 1.
The LTRWC has made its budget based on sales of 4 million gallons per day.
Walton said the commission is only selling an average of 3.8 million gallons per day currently.
Cities like Russellville have done all they can to eliminate waste and reduce their water usage in order to save money.
Unfortunately, those saving eat into the bottom line for the LTRWC.
“The entities are being as careful as they can,” Walton said. “They’re trying to have not any waste.”
The main expense for the water commission is its hefty debt service.
There is about $55 million still owed on the bonds, the largest of which is $48 million.
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.
Three years ago, USDA Rural Development, which holds the largest bond for the water treatment facility, forced the LTRWC to raise its rates by by 44 cents per 1,000 gallons.
Walton said that because the board was proactive this time, she doesn’t expect Rural Development to step in and force a larger rate increase.
“They have the authority in the covenant to do that if they think it might be a problem, but I wouldn’t expect it,” Walton said. “Since we have been proactive, they will probably go along with that.
“We need to stay soundly financed, but our board didn’t want the increase to be any larger than what we needed to get by with.”
In the meantime, the LTRWC will try and cut costs wherever possible, Walton added.
“One of our biggest expenses is buying the chemicals we need to treat the water,” she said. “We have been very successful in keeping those prices in check.”
The LTRWC has also partnered with the TVA and runs its pumps during off-peak hours, which allows the TVA to give them refunds on electricity usage.
If another user could be found, it would help by bringing in more revenue for the water commission, but so far the board has not had any luck in doing that.
“We are always hoping we might find another user,” Walton said. “That would make a big difference. Even though we are always alert to that, we haven’t found anybody at this time”
As the water plant nears its 10-year anniversary in May, the budget for repairs has also increased.
“When we get older we have to have some repairs and that figures into our budget,” Walton said.