Before city council’s next regular meeting June 26, an ordinance to raise the rates of direct municipal water customers is expected to be drawn up for approval.

“It’s just an unfortunate situation,” said Fairmont Mayor Scott Sears. “We hate to call this a rate increase. Basically, it’s an emergency surcharge that we have to apply because of the crisis situation we were in.”

Referring to a set of water emergencies in February and March that racked up immediate costs of more than $300,000, Sears and council members are bidding for this “emergency surcharge” to be a temporary fee applied fairly to every direct customer based on usage.

“We are going to make sure this is a very temporary situation to basically keep us out of a dangerous situation financially,” said Sears.

In total, City Manager Bruce McDaniel, city utilities manager Dave Sago and Eileen Layman, city finance director, explained at a work session last week that the city will need to generate $895,455 in additional revenue in the next three and a half years in order to keep up with its debt services as well as routine maintenance and use.

But after council vetoed the staff’s proposal to implement a flat surcharge of $5.57 per month on all direct residential and commercial customer bills, the exact additional charge is still up in the air until more numbers are crunched.

“It’s completely unfair to do it as a surcharge,” said Councilman Matt Delligatti. “We believe that a rate increase that will be spread across our users equally is not only better for users but, in the end, is a better way to go to deal with our debt and pay the water fund.”

In the next week, council members will review new figures drawn up by Layman, which will show a customer increase based on usage and applied per tier, and create a new ordinance.

And with a short timeline to implement this rate hike, mainly because of a delinquency in the city’s payments on three bond issues for capital expenditures within the system, McDaniel said the city will need to introduce the new ordinance at its next meeting so a public hearing on the issue can be scheduled for July 10.

Currently, he said the city has tapped into its reserve accounts for the bonds and needs to pay that money back as soon as possible. He added that invoices for $750,000 to fix and replace membranes within the system during the crisises are beginning to come in, and the funds are not there to pay for that, either.

McDaniel said the city has had meetings with Canadian firm GE-Zenon Environmental Inc., the plant’s manufacturers, and both parties’ attorneys to discuss the cause of the emergencies earlier this year.

But with no conclusions resulting from these discussions, as of yet, he said he could not reveal what has been talked about. He added that the money needed to pay for the repairs must still come from the city.

“We could be reimbursed or not have to pay total invoices if indeed there are certain things the city is not responsible for paying for,” he said of the situation with Zenon. “But there are bills and obligations we have to pay now, and we can’t wait for negotiations to go through for what happened — if anything — to pay for these.”

McDaniel added that the city will also likely have to hire their own experts to get to the bottom of why the emergencies occurred, which could cost even more money.

A situation with the city’s nine resale customers was also addressed. Originally, when the $5.57 surcharge was drawn up and introduced to council Tuesday, McDaniel said one of the reasons for it was because it would not apply to resale customers.

During the city’s last rate increase in 2005, the state Public Service Commission determined from customer claims that the city’s resale customers had been overcharged by more than $200,000 a year. To prevent a similar situation this time around, McDaniel said resale customers were just not figured into the equation to begin with.

“We are not sure we can raise their rates,” he said. “Until we determine what the breakdown should be between all classes of customers, we can’t say we are going to raise resale rates because the last time it was not justified.”

With no getting around a rate increase, Sears concluded that council is confident it will, in the end, be able to find the best solution for both the customers and the city to solve this financial issue.

“I think the customers will look at it as we really gave this a hard look and did the best thing for the citizens of Fairmont,” he said. “I feel very confident that this will become a resolution that council will be pleased to present to citizens.”

E-mail Mallory Panuska at mpanuska@timeswv.com.

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