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Berkeley County's public water district to return $200,000 in capacity-improvement fees

PSC order regarding the capacity-improvement fees was sought by attorney Laura Faircloth, who has been representing her husband, Larry Faircloth

August 15, 2012|By MATTHEW UMSTEAD | matthew.umstead@herald-mail.com
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MARTINSBURG, W.Va. — Berkeley County’s public water district will not challenge a West Virginia Public Service Commission order filed last week and is returning more than $200,000 in capacity-improvement fees the utility collected after the regulatory agency rescinded them in May.

“They were all mailed back (Wednesday) with interest,” said Paul S. Fisher, the water district’s executive director.

The Berkeley County Public Service Water District board discussed the PSC decision in executive session at the end of its regular meeting Monday night, but took no formal action afterward,

The fees collected for new home construction since the Public Service Commission’s initial May 9 decision had been held in an interest-bearing account, Fisher said. The fees will no longer be collected going forward, Fisher said.

The PSC order denied petitions for reconsideration, which were filed by the water district and the Berkeley County Public Service Sewer District.

The county-run utilities were given 15 days from Aug. 7, the date of the order, to return the fees.

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Sewer district legal counsel William F. Rohrbaugh said Wednesday that the district’s board still was reviewing its options and could not comment further.

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

The PSC in May ruled that criteria based on rapid and expansive growth no longer were being met and ordered the fees to be discontinued.

Without the fee revenue, water and sewer district officials said in May that their customers could be asked to pay more so they can pay off millions in financing for improvements.

Fisher also noted that a petition could be filed with the PSC by December for a rate increase so the county-run utility can pay the debt service on a bond anticipation note. The water district owes about $12 million that was to have been paid with capacity-improvement fees, Fisher said.

The sewer district was little more than five years into a 20-year repayment term for paying off $15 million in bond financing when the PSC decision to rescind the fees was made, according to the commission’s order.

The sewer district’s debt is associated with treatment-plant projects in Inwood and Baker Heights, W.Va., according to the order.

In ordering the fees to be returned, the PSC’s order also cited the sewer district for not providing any support for the sewer district’s apparent contention that commission orders are automatically stayed when a petition for reconsideration is filed.

The PSC order regarding the capacity-improvement fees was sought by attorney Laura Faircloth, who has been representing her husband, Larry Faircloth, and his business, Larry V. Faircloth Realty Inc., in a protracted legal battle with the public service districts.

After the public service districts asked the PSC to reconsider the May 9 decision, 23rd Judicial Circuit Judge John C. Yoder ordered that Larry Faircloth be granted a preliminary mandatory injunction and not be forced to pay the capacity-improvement fees for building projects in the Elizabeth Station subdivision.

Laura Faircloth said last week that she is considering whether to file her own appeal with the state Supreme Court of Appeals to challenge the PSC’s assertion that it has the power to authorize counties to collect the fees.

Among other claims, the Faircloths have argued that the fees cannot 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.

Aside from the capacity-improvement fee issue, Fisher said the water district is awaiting a decision by the PSC on the utility’s request to build a consolidated operations center, a raw waterline and a phase of a water transmission main project. The project’s estimated cost could increase customers rates by a little more than 1 percent, Fisher said.

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