25 Percent Water Rate Hike Recommended for Dade, Plus Yearly 3 Percent

August 28, 2019

Trenton Mayor and Dade 911 director Alex Case addresses the water board meeting on Monday. Case said Trenton sewer rates will go up soon, too.


Tuesday night's meeting of the governing board for the Dade County Water Authority revealed that a rate hike is coming down the pipes for customers shortly, though no decision was finalized at the Aug. 27 meeting. 


Jeff Pendergrass, the new water company manager who since taking over in June has made an armlength list of the utility's deficiencies in need of urgent remediation, presented the board with a similarly exhaustive study of rates, leaving it with them to chew over until next month. But asked Wednesday for a synopsis, he clarified by email:


"I gave the board six different options for water rate increases and revenue generations last night. However, my recommendation to the board was a water rate increase of 25 percent this year to the base charges only (i.e. 0 – 2,000 gallons) and then a perpetual 3 percent annual increase effective July 1st of each respective year thereafter, in order to keep up with inflation."


Pendergrass updated the board on the $586,500 list of improvements he presented them last month, reporting on which had been addressed and which added, pointing board member to a new grand total in their information packets which he did not name for the benefit of the listening public, except to say of the figures: “They’re a little bit inflated for budgetary purposes.” 

(Photo: Jeff Pendergrass points out aging machinery at a recent water plant tour.)


The water board had last month tabled a decision on an $800,000 life insurance policy the water company had invested in years ago to provide for the retirement of former general manager Doug Anderton. Anderton's pension already being adequately funded through a certificate of deposit, the board had discussed in July cashing in the life insurance policy to fund the improvements Pendergrass requested. This month, assistant manager Sherri Walker gave the board an additional impetus to do so: The full maturity of the policy would not arrive in 10 years as she had previously estimated but in 30. The surrender value now being $608,000, she repeated that the cashout would pay for everything on Pendergrass's wish list.


The board voted unanimously to cash in the policy to fund the improvements, but board member H.A. McKaig reminded Pendergrass: "It’s a pretty long list." He urged him to prioritize his projects and get the most urgent ones done first. “The plant is leaking like a sieve,” he said. Also, said McKaig, the heating and air system at the plant was terrible, there were foundation problems at the office, and painting of the plant's pipe system should be gotten out of the way before the next phase. "I’d like to see those four things lumped together as phase 1,” he said.


(Photo from water plant tour: The old pipes could use a lick of paint.)


Pendergrass also presented the board an update on progress for another list of projects covered by a USDA (U.S. Department of Agriculture) loan. Again, The Planet was not privy to that report but here's information from a July 2018 Planet article about the water board meeting last summer when the loan was closed: It was for $4,889,000 at 3.125 percent over a 40-year repayment period, with a $17,894 monthly payment. "The water authority will use the money to pay for upgrading a raw water intake and a booster station, replacing some asbestos piping, installing and connecting a water main in a fixed-base meter-reading system, and refinancing a small GEFA loan," The Planet reported at the time.


Ms. Walker said the $2 million of that for new, modern meters paid for itself in saved labor time and more accurate usage readings. She described how ratepayers regularly call to complain after two months or so with the new meters, asking how they could possibly be using that much water. “That was the whole reason for putting this in the project, because it can almost make the payments,” she said.


McKaig asked if projects could be moved from the USDA list. "This is the first time we as a board have seen this list,” he said. Probably not, said Ms. Walker; the engineering had been done and the loan approved. But she said she'd check further before the next meeting.


The water board voted to knock out a problem that had lingered from year to year: getting water to a fire hydrant on Wayside Line in West Brow. The hydrant is currently useless, fed by an inadequate pipe for sufficient water flow, and the neighbors have repeatedly petitioned the water company to fix it, offering to bear the expense for pipes themselves and offering rights of way for a route for the pipes. Manager Pendergrass recommended solving the problem instead by boring under the road, which he said would cost $24,500 as opposed to $30,513 for taking the more circuitous route, and would result in less line to maintain.


The motion carrying unanimously, McKaig asked Ms. Walker if the water company still had SPLOST (special purpose local option sales tax) funds available for fire hydrants, and if so, would this project be eligible? She said yes, there was still SPLOST, and yes, it should be eligible. She will check further.


But that old project soon to be out of the way, and the others enumerated on respective lists, Pendergrass presented yet another biggie: Upgrading the six-inch line up Lookout Mountain to a 12-inch line. “We’ve been asked by McLemore Golf Resort if we can supply them with significantly any additional water flow,” said Pendergrass.


The old line up Lookout was put in in 1962 and was at the end of its useful life, said Pendergrass. He gave estimates of $1.4 million and $2.8 million, the latter including a pump station partway up the mountain which he said the engineering firm believed necessary. Even disregarding McLemore's needs: "We can’t really grow significantly without replacing that thing," said Pendergrass.


(Photo: In a publicity shot, a helicopter drops bridge segments into place at the McLemore golf course.)


The McLemore golf and luxury housing resort lies mostly in Walker County, but at the Tuesday meeting Pendergrass supplied the statistic that 12 percent of Dade Water's customers are in Walker. It is to the developer of the McLemore resort--earlier called Canyon Ridge, and before that Tauqueta Falls--that Pendergrass in July proposed transferring ownership of a $375,000 sewage plant the Dade water company inherited when the last developer there went bust, after having earlier persuaded Dade Water to partner with him on the sewer. The board had nothing to announce about that proposed gift at Tuesday night's meeting.


 Pendergrass said the millions for the Lookout Mountain work had not been factored into the rate hike calculations he presented the board.  "That just came up this week," he said.


Cost factors Pendergrass did mention as figuring into his water rate calculations were his goal of replacing chlorine gas with bleach, which is safer to use but increases the cost of treating each gallon of water, and his need for more staff.


Board member Dr. Billy Pullen recommended that if rates had to go up, they should go up enough that there would be no need to push them higher any time soon.



But Pendergrass introduced the idea of a regular yearly increase in rates, which he said was standard practice at some other water companies, and kept revenues up with inflation. Ms. Walker added that if Dade Water had been doing this yearly, rates would already be higher than with the proposed increase, and resistance lower. “People get conditioned to that,” she said.  


Also discussed was the water company's ongoing quest to coordinate better with the county's volunteer fire departments in tracking their water usage. There is never any question of charging the FDs, but the water company is required by its regulators to account for missing water and continues working with firefighters to better report what they take from hydrants in their drills, tests and actual firefighting. Alex Case, Dade's emergency services director and incidentally the mayor of Trenton, spoke of modern handheld devices firefighters can use with the eventual goal of tracking all water usage. “That’s going to be an ongoing target,” he said. Case also reported on the Trenton sewer's struggles toward upgrading its 30-year-old infrastructure, predicting that Trenton sewer rates would soon go up as well.


Finally, the water board took action on personnel. It approved a  list of duties and guidelines for manager Pendergrass. "We don’t want to micromanage him," said member McKaig. "But there’s some point where he needs to come to us.”


And the board approved appointing employee Ashley Castleberry as public relations director, to deal with both requests for information of any kind and customer complaints. In both cases, requesters will be required to fill out a form. This, explained Miss Walker, will allow the water company to keep records of who requests what information and who complains about what, and will have the additional benefit: “This gives them time to cool down before we get into it with them.”


Readers may obtain the forms in person at Dade Water's office at 250 Bond St. They are available at the water company's website, mydadewater,com, as PDFs readers can print and fill out by hand, with their choice of credit card for payment, in the case of information. As an additional PR measure, Dade Water will also maintain a Facebook page.


The next regular meeting of the water board is scheduled for 6:30 p.m. on Tuesday, Sept. 24, in the Dade Administrative Building.

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