No Rate Jump In Pine-Strawberry Water Buyout

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Water rates will not be raised if the Pine Strawberry Water Improvement District is successful in its takeover of the communities water companies

That's the message concerned water users heard last evening, Aug. 21, during a meeting of the PSWID board.

Referencing a capital improvement budget and a M&0 budget compiled by the Valley consulting firm of Coe and Van Loo, board president William Haney said it would take about $4.2 million to acquire the two towns' water companies and make immediate and necessary repairs in the systems.

He also said the total annual M&0 budget would be $1,198,000. He then pointed to the amount of money Pine and Strawberry water companies received in gross revenues last year, $1.3 million, saying that was enough to fund the M&O budget.

Inflated water rates in Pine and Strawberry have been a huge worry for users partly because at least one local watchdog group predicted a PSWID takeover of PWC and SWC would send water bills skyrocketing.

In the proposed M&O budget was $316,000 for debt services which would be repayments on the $4.2 million in financing that would be used to purchase and improve the two water systems.

Among the immediate need items in the capital improvement budget was $365,000 for the acquisition of the 1,045-foot deep Milk Ranch Well owned by Robert Randall and Ray Pugel.

When an audience member asked if that amount was to purchase the well or for just water from it, Haney indicated it was to eventually acquire the well. That amount is about what Randall and Pugel have in the well that first began producing water in the fall of 2006. Which means, $365,000 is only a replacement cost and not a purchase price.

For the board to purchase the well, an appraisal will probably have to be done.

While Pugel is a businessman who makes his living calculating costs and profits, he said "we are here to help the people."

Also, among capital improvements for the first year was $100,000 to refurbish existing wells, $150,000 for new maintenance equipment and $257,000 for immediate distribution improvements.

The largest item on the proposed M&O budget was $270,000 to pay salaries wages, and benefits for three operators, one foreman and a general manager of the PSWID water operations.

Also at the meeting, the board listened to a presentation of a Pine-Strawberry citizen's water group.

During the presentation spokesman Bob Cassaro asked that if the PSWID's take over of the two water companies is indeed successful, the board's operating and business plan should be fiscally responsible, provide for adequate water supply, control new meters and insure safe water.

Also, Haney led a short discussion about the future installation of fire hydrants on the water system and whose responsibility it would be to pay for them. The chairman called fire protection "a community issue not a fire board or a water board issue."

Board member Don Smith was appointed to meet with the fire department and fire board to begin possible plans for fire protection needs.

The board also approved paying Coo and Van Loo $5,500 to return to Pine and Strawberry to do a more complete appraisal of the assets of the two water companies.

Board attorney John Gligle said he had not received formal permission from Brooke Utilities President Robert Hardcastle, who operates the Pine and Strawberry water companies, to do the inspections,

Gligle did say, however, it was legal for Coo and Van Loo to be on BU property to do the appraisals.

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