Date: 05-06-2019

‘A real affordability crisis’: Troubled water district at a crossroads

WARFIELD – The Martin County Water District, which has made national headlines for its customer complaints about poor water quality and reliability, is at a crossroads.

State regulators ordered the district last year to find a new management company to run its day-to-day operations, a move that would likely lead to significant rate increases in a county where more than a third of residents live in poverty.

That process is set to move ahead despite the district’s claims that it has made significant progress in the past year and a half, including major line repairs that have improved its water-loss rate from 72 percent last year to about 38 percent today.

While new management could put the district on a fast-track to providing consistently clean and reliable drinking water, citizen leaders and a district official said it will come at a high cost to customers.

“We’re facing a real affordability crisis,” said Mary Cromer, an attorney with the Appalachian Citizens’ Law Center, who represents the Martin County Concerned Citizens activist group.

The district is scheduled to receive bids from management companies later this month, and will finish its review of bids by May 31.

After a public meeting in Warfield Thursday, Jimmy Don Kerr, the chairman of the Martin County Water Board, said the district may only receive one bid.

Kerr declined to put a figure on how much customers should expect their water bills to increase with new management — until the company releases its official bid, the cost is unclear — but said “I fear it will be a major rate increase.”

The district is expected to have a signed contract with a new management company by July 31.

New management would still be overseen by the Martin County Water Board, a group of unpaid citizens appointed by the county judge-executive to oversee the district.

If the district does not receive any bids, or fails to come to an agreement with a management company, state regulators have warned that the state will put the district into receivership, a process that would completely relinquish control of the district to another utility and dissolve the board.

“They see this as the last straw, the last attempt to let this community water district stand,” Cromer said.

Receivership would likely lead to even steeper rate hikes, Kerr said.

Leaders of the Martin County Concerned Citizens group said they will advocate for what customers feel is the right step forward. That likely means opposing any rate increase, Cromer said.

Customers have already seen their bills spike in recent months.

In November, the Kentucky Public Service Commission, the state agency that regulates most utilities, passed an order allowing the district to increase rates by about 36 percent. If the district finds a new management company, it could add an additional surcharge, bringing the total rate hike to 44 percent.

The PSC’s orders have grown progressively more strict over the past year and a half.

The commission appears dedicated to fixing the problems that many customers have described in interviews with the local newspaper in Inez, the Mountain Citizen, the Herald-Leader and national media outlets, Kerr and Cromer said.

Residents have reported long shutoffs that have left them without running water for more than a week. They have posted photos and videos of brown and cloudy water flowing from their taps.

Cromer said the PSC’s actions against Martin County could serve as a model on how to address the future of rural water systems in Eastern Kentucky, where a number of districts face similar financial and operational struggles.

In Floyd County, the Southern Water and Sewer District declared a state of financial emergency in March, and many districts throughout the region lose more than 30 percent of the water they produce through leaking and aging infrastructure.

Martin County Water District is scheduled to receive about $4.6 million from grants funded by the Appalachian Regional Commission and the Abandoned Mine Lands fund to repair and replace parts of its treatment plant and water intake system, but the district has not yet received that money.

Cromer said the district will also receive an additional $2.1 million Abandoned Mine Lands grant to run new lines to the federal prison, airport and the county’s industrial park.

Kerr said that grant has not been finalized.

Martin County Concerned Citizens has advocated for grants to pay for improved service lines — the lines that feed water to people’s homes. When those lines crack, sediment and dirt can enter the pipes and cause the brown and miscolored water that has made Martin County infamous for poor quality.

The full cost of infrastructure repairs, though, in Martin County and elsewhere, could force rate hikes across Eastern Kentucky for families who can’t afford them, Cromer said.

“There could be a huge affordability crisis in Eastern Kentucky if the PSC mandates rate increases for all those districts,” Cromer said.

By Will Wright
Lexington Herald-Leader