Quantcast

Martin County Water District Says Situation Is "Dire" - LEX18.com | Continuous News and StormTracker Weather

Martin County Water District Says Situation Is "Dire"

Posted: Updated:

MARTIN COUNTY, Ky. (LEX 18) - Following nearly two weeks of water outages in rural Martin County, the embattled water company is saying that the situation appears bleak.

As Martin County Water struggles to keep water on for its residents after a series of difficulties, the company says they must ask for a rate increase.  Thousands of customers of Martin County Water District saw their water pressure decrease dramatically during last week's freezing cold.

The company explained what they were doing in a meeting to remedy the outages. They were faced with two options, they said. The first would be cutting off water to the entire county while they attempted to fill the tank reservoir. The other would be to strategically cut water to different areas of the county. Unfortunately, even after doing the latter, the company admitted that they were still having difficulty.

A post released on the Facebook state that situation is dire and they aren't sure how to fix the issues, blaming finances. The company is not recouping enough cost to fix the issues that are costing them more money to fix. The cycle, they say, is dire.

"The primary causes for our current situation are a decrease in customers leading to lost revenue, coupled with an increase in utility costs to repair failing infrastructure. This shortfall has created an accounts payable debt as of November, 2017 of $831,000. Plainly speaking, we owe $831,000 in past due bills that we don’t have the funds to pay," reads a statement on the organization's Facebook.

You can read the entire letter in full below:

Fellow Citizens of Martin County,

We are writing to you as members of the newly-appointed water board for the Martin County Water District. Currently the board is composed of the following: John Horn, Chairman; Jimmy D. Kerr, Treasurer; John Paul Hensley; Rex Endicott, and Jared Crum.
We want to be transparent with the citizens of Martin County and update you on our current financial situation. What you are about to read will be shocking, but will shed some light on why the district is in its current state.
Our financial status, to put it simply, is bleak. The problems fall into four major categories:

1. The water district does not currently collect enough monthly revenue to meet its obligations. Specifically, our monthly expenses exceed revenue by 40 percent. For comparison, consider a household bringing home $3,000 a month in income but spending $4,200 a month. We don’t need to explain the devastation that situation would create over time. The primary causes for our current situation are a decrease in customers leading to lost revenue, coupled with an increase in utility costs to repair failing infrastructure. This shortfall has created an accounts payable debt as of November, 2017 of $831,000. Plainly speaking, we owe $831,000 in past due bills that we don’t have the funds to pay.

2. We are now on a cash-only basis with virtually all of our vendors, making it difficult to purchase parts for repairs. As a result, most of our repairs are not permanent fixes, and will most likely be issues again in the future. The current water flow disruption was caused by a broken pump that feeds raw water from the Tug River to the reservoir. These pumps break down often. We do have a replacement pump, however we did not have the funds to pay the vendor, and therefore we could not install the replacement pump. Without a replacement pump, our supply reservoir dropped to a level below where gravity could supply water to the treatment plant where our water is cleaned. Clearly, this is an unacceptable situation.

3. We currently have a water loss rate of 50 percent. Half of the clean water we produce is lost in the distribution system through pipe breaks, service line leaks and failing meters. The recent cold weather has placed additional stress on our pipes and meters, causing even more leakage.

4. With all of these challenges, we are understaffed and cannot afford to hire the employees or outside contractors to adequately serve our district. Our employees are working as hard as possible, and we are extremely proud of the massive job they are attempting to take on. But they simply can’t keep up with the workload. If you see them out on the job, please be sure to thank them. They are working around the clock to try to ensure we have safe, clean, accessible drinking water.

As you all digest this you will see that the situation is dire. We are concerned that, if we continue on this path, we could soon have issues meeting payroll, power and debt obligations. The financial condition is so serious, the Martin County Water District could fail, and we would not just lose water for days, but for an extended period of time. It’s not our intention to scare you. We want to make you aware of just how bad our financial status truly is.
We can not and will not continue down this path. In the two weeks since we were appointed to the board we have taken the following steps to correct our shortfalls:

1. With the efforts of the previous board, water district staff, Kentucky Division of Water and Kentucky Rural Water Association we are now compliant with all EPA drinking water standards. We are producing and delivering safe, clean water. We intend to keep it that way. Providing safe and reliable drinking water to our citizens is this board’s number one priority.

2. The previous board engaged Kentucky Rural Water and BlueWater Kentucky, an independent consultant, to review the financial condition and operations of the water district. Based on their findings and recommendations, we voted to start the process of filing a request to the Kentucky Public Service Commission (PSC) to review our finances and approve a water rate increase of 49%. This action was not taken lightly. We understand the financial burden this will place on many customers in our district. It affects all of us and our families, too. This increase should bring the water district to a break-even status, and allow us to start paying down our accounts-payable debt over a five year period.

3. We voted to execute an agreement to lease a water tank we currently own to the Prestonsburg City’s Utilities Commission for $15,000 per month. The Prestonsburg Commission will meet Tuesday of the coming week, and is expected to review and sign the lease. This additional revenue will help our financial condition and also free up water capacity for our customers.

4. The Board voted for the water district’s General Manager, to begin the process of attempting to secure a short term loan to pay our accounts payable in full. Income from the water tank lease will allow us pay this loan over five years. Chances are, however, a local bank will not provide this financing as they are not likely to take on the financial risk of the District. As a secondary option, we have directed our consultants to pursue funding sources from state agencies. If we are unable to secure a loan, the new revenue from the lease, along with increased revenue from a rate increase, will allow us to meet our monthly obligations and begin to address our accounts payable debt over a period of five years.

5. We have obtained a $1.2 million grant from Appalachian Regional Commission to begin replacing the leaking service lines and meters in the Warfield/Beauty, Lovely and Pigeon Roost areas of the county. With these repairs and updated meters we believe we can cut our water loss significantly. This will free up water capacity for delivery to our customers, reduce monthly expenses and allow us to run the district more efficiently.

6. Treasurer Jimmy Kerr has begun the process of pursuing additional State and Federal grants for the district. He has set up a meeting with Big Sandy Area Development District (ADD) this coming week to review the application for a $4.8 million grant from the Federal Abandon Mine Lands program for replacement of service lines and water mains to reduce water loss. The grant request also includes funding to install new raw water pumps and supply pipe to our reservoir. He has started a dialogue with Kentucky Engineering Group, the Engineering firm selected to manage the Warfield area grant project, to coordinate with the Big Sandy ADD and pursue additional grant opportunities. Competition for these grants is fierce and the process is lengthy. It could be months before we hear anything, and there is no guarantee of success. Going forward the grant writers will attend our monthly board meetings to update us on the status of grants being pursued.

7. We are in the process of reviewing all operations and expenses with an eye to becoming more efficient and improve our service levels. We will evaluate all current management and staff positions to determine if any changes are warranted. We will also review our process of detecting and prosecuting individuals stealing water from the district. In short everything is on the table. The savings we find will be dedicated to reducing our debt obligations.

8. The Board will be reaching out to the Concerned Citizens Group, which has been formed by members of our community, to see how we can assist in any efforts they are pursing to help make improvements to our water system. We believe that the Board and the Concerned Citizens Group should partner and work together, not against each other. After all, we are all citizens of Martin County and we all want clean, safe and reliable drinking water for our homes and businesses. Our goals are clearly aligned.

9. We will be reaching out to local media to form a good working relationship, to keep the public informed about the water district’s progress as we move forward. We are determined to be transparent with the citizens of Martin County, so everyone can stay informed and involved in meeting our goals. The media plays an important role in our society. We intend to respect their role and work with them to the best of our ability.

10. Starting now, we are asking everyone in the community to conserve water. There are steps we can all take during this cold weather spell. Replace or repair any leaking faucets or toilets. When you brush your teeth, turn the water off when not using it. Don’t take a bath every night of the week and shower instead of a bath. Regarding toilets, follow the old camping adage: “if it’s yellow let it mellow, if it’s brown flush it down.” Avoid washing your car. We’re confident you can help us conserve water through this crisis.

In conclusion, we’re sure there are questions on everyone’s minds, including how we got here, and how we are in such bad financial shape. To be blunt, none of that matters now. The current board did not create the issues, nor did the citizens of this community. But we are the ones who will have to make the hard decisions to fix it. What does matter is what we do today and how we move forward. We do not have all the answers. It will take everyone in our community coming together and working collectively on solutions to fix the District. We know that increasing the water rates is not going to be a popular decision. But it is necessary. And we hope the citizens of this community can see this and accept it as our new reality. In truth, this is something that should have been done incrementally over the past 20 years. It would have been a lot easier and more efficient to accept a 5% increase every few years than a 50% increase all at one time. That was not the case, therefore we now need to take the painful, but necessary action to address our revenue shortfall.

We want to leave you with a couple of statements we’ve heard over the past few weeks as we’ve tried to grasp the reality, and gravity, of the situation:

From a PSC member: “There is no savior riding in on a white horse to save the water district. The state is broke as well, and you will see that full well when the Governor releases the new budget. It is up to you guys to fix this issue.”

From a water industry professional: “Martin County is not the only one in this situation, many small water systems in the state are having the same challenges with failing infrastructure, high water loss and meeting EPA drinking water standards”

From one of the grant writers: “People are going to have to start to realize that our water has been subsidized for a long time by coal severance money. That is no longer the reality, and sometime in the near future our water bills will be as much as our electric bills.”

We hope that every member of the community who can do so will join us at the next water board meeting on Tuesday, February 6. We meet the first Tuesday of every month at 8:00 a.m. on the third floor of the Community Center. If you come, know this: we are not looking for, and will not allow, confrontation. We are looking for solutions. We will be looking forward, not back.

We fully understand and expect frustration and anger. It is totally warranted and understood. If you feel the need, take your anger and frustration out through Facebook, Twitter or the social media site of your choice. But then, let’s strap on our boots and go to work. What we are getting ready to tackle is going to be hard and take some time. But there’s no doubt in our minds that if we work together we can--and will--overcome our current situation. 
Thank you,

The Martin County Water Board

WEATHER
MaxTrack Doppler
  • Most Popular StoriesMost Popular StoriesMore>>

  • Woodford Co. Emergency Management: Local State Of Emergency Declared

    Woodford Co. Emergency Management: Local State Of Emergency Declared

    Friday, July 20 2018 5:09 PM EDT2018-07-20 21:09:19 GMT
    WOODFORD COUNTY, Ky (LEX 18) The Woodford County Emergency Management Deputy Director tells LEX 18 that they have declared a local State of Emergency. The State of Emergency has been declared due to wind damage, trees being down, and major road blockages.  Emergency Management crews are telling people to stay out of Woodford County unless you have to come in. 
    WOODFORD COUNTY, Ky (LEX 18) The Woodford County Emergency Management Deputy Director tells LEX 18 that they have declared a local State of Emergency. The State of Emergency has been declared due to wind damage, trees being down, and major road blockages.  Emergency Management crews are telling people to stay out of Woodford County unless you have to come in. 
  • Cleanup Begins After Powerful Storms Blast Region

    Cleanup Begins After Powerful Storms Blast Region

    Saturday, July 21 2018 10:53 AM EDT2018-07-21 14:53:32 GMT

    LEXINGTON, Ky. (LEX 18) — Powerful storms that swept through the region Friday caused damage and widespread power outages. Lexington saw a lot damage, including trees falling into homes and power lines down. Kentucky Utility crews are out in force, but thousands remain without power Saturday morning. For more information on outage areas, check out the utility's outage map here. A huge tree fell onto a home along East Maxwell Street, but no one was injured. "Whe...

    LEXINGTON, Ky. (LEX 18) — Powerful storms that swept through the region Friday caused damage and widespread power outages. Lexington saw a lot damage, including trees falling into homes and power lines down. Kentucky Utility crews are out in force, but thousands remain without power Saturday morning. For more information on outage areas, check out the utility's outage map here. A huge tree fell onto a home along East Maxwell Street, but no one was injured. "Whe...

  • Ticket Mix-Up Put Family On Ill-Fated Missouri Tourist Boat

    Ticket Mix-Up Put Family On Ill-Fated Missouri Tourist Boat

    Saturday, July 21 2018 9:31 AM EDT2018-07-21 13:31:44 GMT

    BRANSON, Mo. (AP) — More than half of the 17 people killed when a tourist boat sank on a Branson lake were members of the same Indiana family, and they likely wouldn’t have been on the ill-fated trip but for a ticket mix-up.

    BRANSON, Mo. (AP) — More than half of the 17 people killed when a tourist boat sank on a Branson lake were members of the same Indiana family, and they likely wouldn’t have been on the ill-fated trip but for a ticket mix-up.

Powered by Frankly

© LEX18.com 2018, LEX18.com
A CORDILLERA COMMUNICATIONS Station
All rights reserved
Privacy Policy, | Terms of Service, and Ad Choices

Can't find something?