BY ROGER SMITH
MOUNTAIN CITIZEN

INEZ — Martin County Water District customers have paid a debt service surcharge in addition to their monthly water bills since March 2018 to reduce the district’s past-due vendor debts. Nearly four years later that debt has grown from $800,000 to over $1.1 million.

The Kentucky Public Service Commission initially ordered the surcharge be used to pay accounts existing on or before April 1, 2018. Later the PSC gave the water district permission to use the money to pay Alliance Water Resources to manage the water district.

“We added the water district’s old debt to Alliance to past-due vendors debt so you could keep an eye on it,” Alliance manager Craig Miller told MCWD Board members in a Dec. 28 meeting. “We have consistently been able to make payments to Alliance . . . as well as an extra $10,000 toward past-due payments. So, we are seeing some relief in that regard.”

The past-due balance owed to Alliance is $405,768.85.

During the water board’s review of monthly financials, board member Greg Crum questioned Miller about the increase in the management and operations payment to Alliance in November.

“The actual management and operation payment is $410,458, and the budget is $168,507,” said Crum. “That seems like it was huge – the $410,458. What was going on with that?”

Miller said that the list of bills that Alliance provided to the water board might not have actually been paid, and he would follow up and find out.

“It would have to do with an additional payment made as well as your repair cap,” said Miller.

Board member Lee Mueller asked Miller who keeps track of the payments, to which Miller said he, clerk Cassandra Moore and Alliance’s corporate accounting office.

“Did that bring up any flags,” Mueller asked.

Miller said there had been no change in what the water board pays Alliance, but perhaps there had been “a movement of money.”

Miller announced that $56,007.42 would be written off to bad debt for 2021. Eight of the 142 customer accounts involved were deceased customers.

“For a lot of this, we’ll discuss, as well, collection agencies,” said Miller. “We’re still receiving the funds, but the purpose, as you all know, is to write it off so it does not appear on our books anymore. But we’ll still continue to try to recover the debt from those.”

Crum noted that some customers are still in the county but have not made payments.

“I see their names, and they’ve not moved off,” said Crum. “Maybe it’s other properties they own or something like that. But isn’t their water cut off after a certain point? There are people here who owe $1,200, $700, $500. What is the process that we go through?”

Miller said customers are always shut off after two months of arrearage. He went on to say that many people who run up bills would come in and have their water put in other people’s names.

Crum then asked about the procedure for terminating water service when people move out of the county.

Miller said there are many times the billing office does not know a customer has moved.

“So that bill just keeps on going?” asked Crum.

Miller told Crum that when a meter shows zero usage, it gets flagged.

Mueller asked what happens with a customer who gets their debt written off.

“Well, it goes on their credit when it goes to collection,” said Miller.

“Can they begin receiving water again if they have a bad debt?” Mueller asked.

According to Miller, customers cannot open new accounts in their names until their debts are paid.

“We can’t deny anyone service if the tap is there. We can deny them under the pretenses that ‘we can’t get you water,’” said Miller.

Miller pointed out bill payment assistance is available through Big Sandy Area Community Action Program.

“I will tell you that the ladies in the office are not filling out applications for customers this time,” he said. “We did it before, but we found out that customers are expecting us to do it. And the ladies already have a lot to do. That’s what the CAP office is for.”

Miller presented the 2022 budget that showed $2,755,3659 revenue, $2,500,650 operating expenses, including interest expense of $80,458, net revenue before debt (principal) $174,262, debt service (P & I) $212,483, net revenue (after ops and debt) $42,236, debt service coverage required 1.20, and capital improvements from cash and net revenue $1,293,606.

Water loss for November was 71.67 percent.