March 4, 2013 — The Morehead Utility Plant Board is discussing potential rate increases.
“The wastewater department is losing money,” Mike Nickell, MUPB general manager, said. “That department is getting worse each year.”
The discussion stemmed from a local small business consultant's seven-year review of the plant board.
Mike Morley suggested the board increase sewage income by 21 percent and water income by six percent.
“Gas is difficult to project but gas prices could be increased by one percent,” Morley's report said.
Nickell said gas and water rates likely will not go up.
“In the wastewater treatment department, we've actually lost in the neighborhood of $332,000 in operations,” Nickell said.
Nickell said that figure does not include additional debt related to the 2010 flood.
The debt expense plus chemical, utility and regulatory compliance continues to put financial pressure on all enterprises, he said.
He said this is the first analysis of the board's finances.
“This report shows that in order for us to stay solvent, we're going to have to re-look at our costs and we have to re-look at our rates,” he said. “We've not had a rate increase in nearly 10 years for water or wastewater,” he said. “It's something that's inevitable. We feel like each department should be pulling its own load.”
The board authorized Nickell to develop a short list of consultants with rate analysis backgrounds to conduct a second independent review and present a recommendation at the next meeting.
“Ideally, the next review and report will give us a more definitive direction,” Nickell said.
Nicole Back can be reached at email@example.com or by telephone at 784-4116.