Charleston residents could pay higher sewer bills or face delays in state-mandated improvements under a proposal that would limit loans to big cities for utility projects, City Council members learned Monday.
CHARLESTON, W.Va. -- Charleston residents could pay higher sewer bills or face delays in state-mandated improvements under a proposal that would limit loans to big cities for utility projects, City Council members learned Monday.
"In short, there is a proposal to preclude cities like Charleston from access to the low-interest state revolving loan fund," Larry Roller, director of the Charleston Sanitary Board, told members of council's Finance Committee.
Roller said the state Infrastructure and Jobs Development Council (IJDC), which allocates loans through the State Clean Water Revolving Fund at the Department of Environmental Protection, recently cut the amount of a state loan to the Sanitary Board in half.
The IJDC is considering a plan under which revolving fund would lend money only to utilities that have high rates. That would effectively cut out larger cities like Charleston, Huntington and Morgantown.
"We couldn't qualify for these loans," Roller said. "As an example of how this hurts our ratepayers, we applied for a $20 million loan for the Kanawha Two-Mile project." The IJDC initially approved the entire loan, at 3 percent interest, he said. But after a member objected, the board cut the loan to $10 million.
"Over a 30-year bond period, it would cost ratepayers an extra $9 million in interest," Roller said. "We're going to reapply."
Meanwhile, the sanitary board has plans for another $60 million of improvements to its sewage collection system during the next five years, Roller said. Normally the board could expect to fund about half of that through the 3 percent state program. If the new rules are adopted, ratepayers could face another $27 million in interest charges.
CHARLESTON, W.Va. -- Charleston residents could pay higher sewer bills or face delays in state-mandated improvements under a proposal that would limit loans to big cities for utility projects, City Council members learned Monday.
"In short, there is a proposal to preclude cities like Charleston from access to the low-interest state revolving loan fund," Larry Roller, director of the Charleston Sanitary Board, told members of council's Finance Committee.
Roller said the state Infrastructure and Jobs Development Council (IJDC), which allocates loans through the State Clean Water Revolving Fund at the Department of Environmental Protection, recently cut the amount of a state loan to the Sanitary Board in half.
The IJDC is considering a plan under which revolving fund would lend money only to utilities that have high rates. That would effectively cut out larger cities like Charleston, Huntington and Morgantown.
"We couldn't qualify for these loans," Roller said. "As an example of how this hurts our ratepayers, we applied for a $20 million loan for the Kanawha Two-Mile project." The IJDC initially approved the entire loan, at 3 percent interest, he said. But after a member objected, the board cut the loan to $10 million.
"Over a 30-year bond period, it would cost ratepayers an extra $9 million in interest," Roller said. "We're going to reapply."
Meanwhile, the sanitary board has plans for another $60 million of improvements to its sewage collection system during the next five years, Roller said. Normally the board could expect to fund about half of that through the 3 percent state program. If the new rules are adopted, ratepayers could face another $27 million in interest charges.
"We'll either have to raise rates or defer projects, which the DEP is putting pressure on us to do," Roller said.
The IJDC could vote on the Jarrett plan at a July 2 meeting.
"The idea is communities like Parkersburg and Morgantown can go to the private market [for loans], and smaller PSDs just can't do that," Roller said.
"The goal is to get infrastructure where there is none, and that's a good goal. In my mind they're going about it wrong."
Council members passed a resolution Monday evening urging the IJDC to reject the proposal. Copies will be sent to Gov. Joe Manchin and IJDC members.
Mayor Danny Jones said he has little hope the resolution will be effective.
"It's another anti-urban thing," he said. "We can put pressure on them, but I doubt we'll be lucky on that. This state is rural-thinking. Doesn't mean it's bad. That's just the way it is. Under Manchin, it's less inclined to help cities."
@tag:Reach Jim Balow at ba...@wvgazette.com or 304-348-5102.
