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West Virginia PSC ruling might mean higher water, sewer rates for Berkeley County residents

The Public Service Water and Public Service Sewer districts can no longer assess capacity improvement fees on new building lots

May 15, 2012|By MATTHEW UMSTEAD | matthew.umstead@herald-mail.com

MARTINSBURG, W.Va. — Thousands of Berkeley County residents might be asked to pay more for public water and sewer services due to a recent decision by the West Virginia Public Service Commission.

The regulatory agency on May 9 ruled that the Berkeley County Public Service Water District and the Berkeley County Public Service Sewer District can no longer assess capacity improvement fees on new building lots.

The PSC’s decision could result in a roughly 14 percent increase for water district customers and a 10 percent increase for sewer district customers to make up for that lost revenue, according to the water and sewer district’s executive directors.

The water district said it serves nearly half of the county’s population and the sewer district said it serves more than half.

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The PSC ruling means that each utility must find other revenue to pay for millions of dollars worth of upgrades to the systems so they could handle the county’s rapid growth.

Paul Fisher, the water district’s executive director, said the utility owes about $12 million of $20 million it borrowed.

Curtis B. Keller, Fisher’s counterpart at the sewer district, estimated the utility owes between $12 million and $13 million that it had planned to pay off with the capacity improvement fee revenue. Keller said the sewer district originally borrowed a similar amount.

The PSC decision comes more than three years after Larry Faircloth of Larry V. Faircloth Realty Inc., filed a complaint asking the PSC to rescind the capacity improvement fees until economic conditions improve, and arguing that the fees were not allowed by state law.

The $3,120-per-lot capacity improvement fee charged by the water district and the $3,650 fee charged by the sewer district were first authorized by the PSC amid the booming housing market in the last decade.

The PSC, after a general investigation, ruled this month that current economic conditions don’t support continued collection of the fees, but the agency still maintained it had the power authorize them, according to its 23-page order.

The PSC separately denied Faircloth’s request for a refund of capacity improvement fees that he had already paid.

While pleased with PSC’s decision to stop the collection of capacity improvement fees, attorney Laura Faircloth, Larry Faircloth’s wife, said Tuesday that she intends to appeal the PSC claim that it still has the authority to authorize the fees. 

“It’s a major, major win, but it doesn’t go far enough,” she said of the PSC’s decision.

“Nothing protects the consumer (from being charged fees) in the future at this point.”

Faircloth said she will appeal the PSC’s jurisdictional claim with the state Supreme Court of Appeals.

In her husband’s case, Faircloth said he should not have to pay capacity improvement fees totaling $6,770 per lot because he had installed water and sewer infrastructure in his subdivision at his expense and then conveyed it to the water and sewer districts at no charge. According to the PSC order, Larry Faircloth testified in 2009 that he had conveyed about $600,000 worth of infrastructure to the water and sewer districts.

The cost of the infrastructure was included in sale of the lot, but the capacity improvement fee was still being imposed on top of the homeowner’s regular service bill, according to Laura Faircloth.

Among other claims, the Faircloths have argued that the fees can’t be collected because the county doesn’t have the zoning ordinance required to allow them.

In disallowing the fees, the PSC noted that the county water and sewer districts do not meet the criteria because they would not deplete their service capacities within five to seven years.

Keller said the ruling doesn’t make sense.

“We upgraded our capacity so we wouldn’t exhaust our capacity,” Keller said.

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