Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, September 29, 1993 TAG: 9309290209
SECTION: VIRGINIA PAGE: C2 EDITION: NEW RIVER VALLEY
SOURCE: PAUL DELLINGER STAFF WRITER
DATELINE: PULASKI LENGTH: Medium
Council will hold a special meeting at 7:30 a.m. Friday, probably with more members present than were able to attend the public hearing Tuesday night.
The recommendation to increase the rates starting Friday came from Ernst & Young, a Washington, D.C., consulting firm hired by the town to recommend a new rate structure and ways to make the water fund self-sufficient.
The 24 percent rate increase was an interim recommendation to run through the rest of the 1993-94 fiscal year. The final report, including a recommended rate structure, is due in December.
About 10 speakers at the hearing opposed the increase. Others expressed their opposition by letter, including Councilman Don Crispin, who was out of town and wanted to delay any action on rates until December. Mayor Gary Hancock also was out of town.
Alma Holston wanted council to consider a discount rate for senior citizens and asked that a vote on the proposed increase not be taken Tuesday night.
The other six council members deadlocked on a motion by Nick Glenn to delay any rate change until December. Because there was no tie-breaker, the 3-3 vote killed his motion.
Andy Graham supported the motion to delay, even though he has been sounding warnings for years that rate increases are needed. He opposed increases with the present rate structure, which gives lower costs to high-volume industrial users. "We are compounding our problem . . . selling water below its cost," he said.
The main beneficiaries of the lower high-volume rates are Magnox and Renfro Corp. Dave Spangler, president of Jefferson Mills, another industry, criticized the arrangement as "Robin Hood of Sherwood Forest in reverse."
"We do not expect this increase to have a negative impact on Jefferson Mills. Actually, it may have a negative impact on the town, as we are making some changes that are expected to decrease our water usage 30-50 percent by mid-October," Spangler said in a letter to Mayor Hancock.
Another factor in the water-fund deficit has been that the town has sold less water than projected during some months.
A surprise vote supporting Glenn's motion came from J.R. Schrader, who has not often voted with that faction on water issues.
Vice Mayor Rocky Schrader noted that a 24 percent increase was necessary because the town had let the water fund deficit grow while trying to decide how to handle it. "So every time we try to delay this, we're raising the rates. It's simple arithmetic," he said.
Glenn backed his proposal, saying, "I'm willing to accept a larger rate increase come December, if that's what I have to do. At least I can say I have total information."
Councilman Roy D'Ardenne reminded council that the consultants had estimated a 30 percent increase would be needed to start balancing the fund if the increase was delayed until December. Junior Black joined D'Ardenne and Rocky Schrader in voting against the delay.
by CNB