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Putnam PSD approves 2014-15 budgets that include Poca’s $190K sewer deficit

By Ryan Quinn, Staff writer

SCOTT DEPOT, W.Va. — The Putnam Public Service District’s board on Tuesday unanimously approved its 2014-15 fiscal year budgets, including one for Poca’s sewer system with a roughly $190,000 deficit.

Putnam PSD General Manager Michael McNulty has said the deficit for the Poca system, which the district is assimilating, can be paid off out of an expected $450,000 surplus in the district’s general sewer fund.

For the PSD’s general sewer and water budgets for 2014-15, McNulty said it is too early to project the surplus that will be carried over from the current fiscal year, so that amount was not included in the projected revenue. Such carryover was included in the current fiscal year budget from last fiscal year, so comparing revenue and surplus between the current and 2014-15 budgets, which go into effect July 1, is difficult.

The general sewer budget anticipates a roughly $29,000 increase in sewer revenue, for a total of $6.47 million. It projects a $175,000 drop in expenses, to $6.02 million, for a surplus of $450,000 — up from $246,000 in the current fiscal year.

The general water budget anticipates a roughly $221,000 drop in revenue, to a total $4.18 million. That drop includes a loss of $287,000 in surplus carryover mitigated by gains in other areas, including an $83,000 increase in sales. The budget projects a $43,000 increase in expenses, to $4.12 million, for a surplus of $60,000 — down from $323,000 in the current fiscal year.

The Poca sewer budget projects about $381,000 in revenue and $571,000 in expenses, including $424,000 in operations and maintenance costs and $126,000 in debt and reserve payments.

In February, Poca voters agreed to sell the town’s aging sewer system to the county PSD for $1. On June 10, the West Virginia Public Service Commission approved the transfer, which will add Poca’s 670 customers and $1.8 million debt to the PSD.

The Putnam PSD was supposed to own Poca’s system by July 1, but officials for both entities said bondholders still must sign off on the debt transfer — a process that McNulty said last week could take 60 days. The Putnam PSD and Poca have signed an agreement for the district to operate the town’s system as if it owned it until the debt issue is resolved, and they are asking the Public Service Commission to quickly approve the agreement.

“This is sort of a bridge agreement, if you will, that will put everything in place for us to operate Poca just as if it was ours,” McNulty said last week.

When the Putnam PSD signed a resolution last week approving its end of the deal, it did so through amending the agenda of a special budget meeting to add the item. The state Open Governmental Meetings Act allows such an in-meeting amendment only in the case of an emergency, according to the website and advisory opinions of the West Virginia Ethics Commission, and Putnam PSD did not declare the situation an emergency.

Robert Rodecker, an attorney representing the district and the town in the sewer system transfer, said he advised that the vote was legal because the district previously had approved acquiring Poca’s facilities.

“I didn’t see that there would be any technical violation of the Open Governmental Meetings Act,” Rodecker said.

McNulty said the PSD will have a separate budget for the Poca system in 2014-15 because the town’s residents will continue to pay different rates than the more than 10,000 other PSD customers until the Public Service Commission approves a rate consolidation. He said he hopes that consolidation occurs in a year, by which time the district will have a better idea of how much it will cost to operate the Poca system and what kind of consolidated rate is needed. For average residential sewer customers — those defined as using 4,000 gallons per month — the PSD has an existing monthly rate of $39.64. Poca’s rate is $47.29.

Reach Ryan Quinn at ryan.quinn@wvgazette.com or 304-348-1254.


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