Budget, management contract, record low water loss in June
BY LISA STAYTON
MOUNTAIN CITIZEN
INEZ — Martin County Water Board member Nina McCoy questioned a series of water district issues in a board meeting July 25. Her questions brought to light current issues and potential future trouble, including leaking clarifiers, failed pumps, a low reservoir and never-cleaned water storage tanks. Meanwhile, the water board adopted the 2024 budget, extended its contract with Alliance Water Resources to Dec. 31, 2029, and reported a record low water loss rate for June.
Leaky clarifier
One of McCoy’s major points was a leaky clarifier at the water treatment plant, part of a $3.4 million rehabilitation project. During construction, the contractor cut the metal skirt inside the clarifier several inches too short, then unsuccessfully attempted to use rubberized caulk multiple times to stop the leaks.
McCoy said she was “worried,” noting that, historically, unacceptable construction practices played a role in the district’s current troubled state.
Alliance manager Craig Miller disagreed, “No. Historically what you’ve had is people not following up and saying, ‘No, that’s not good enough.’ What you’re having now is [Alliance manager Tyler Hall] and I both personally climbing down in there, taking videos and pictures and saying, ‘No, that’s not good enough.’”
According to Miller, Bell Engineering redesigned the project “to fix it right,” which included using rubberized caulk instead of replacing the incorrectly cut metal that compromised the integrity of the clarifier.
“I believe this will work,” insisted Miller. “This leak has to be fixed, and we will get it taken care of. And it will be right when it’s done.”
Failed intake pumps
McCoy also sought answers regarding the district’s two raw water intake pumps (2 million gallons per day and 4 million gallons per day). The district purchased the two pumps, variable speed drives for each, and a river screen from Xylem Pump Rental & Sales for $470,286 in 2019.
The smaller pump and VSD were in operation until submerged in floodwaters in January 2021. The 4 MGD pump had never been installed, as Xylem’s delivery personnel dropped it during the initial delivery. After a damage check at Xylem, the pump stayed at the water treatment plant. District staff said they were awaiting the completion of the raw water intake upgrade before installing the larger pump. That upgrade work has been ongoing since 2021.
After the smaller pump was damaged, the district installed the larger pump in the fall of 2021 and reported it “did not work.” Both pumps were sent to Xylem for repairs.
Miller disclosed that the 4 MGD pump remains with Xylem amid a dispute over repair costs. He said there was a problem with the VSD that runs the 2 MGD pump. Bell Engineering is seeking approval to use Abandoned Mine Lands grant funding to replace the drive.
When the reservoir reached a dangerously low level in July, the water district rented a diesel-fired pump for $8,000 monthly. Fuel to operate that pump runs $1,000 a day.
Chronically low reservoir
Without the service of the district’s raw water intake pumps, Curtis Crum Reservoir has been chronically low for the last two and a half years, an issue beyond drinking water. McCoy pointed out the reservoir’s significance as a local fishery.
“The reservoir may have enough that we’re getting water, but you know it is also a source of fishing,” said McCoy. “It’s a healthy water system if it’s full. If not, it’s a problem. Fish & Wildlife can’t stock it now because it’s low. So that’s something that we need to think about.”
McCoy shared that her late father-in-law and longtime game warden Hayes McCoy viewed the initial stocking of the reservoir with fish as significant for the community.
No tank cleaning
McCoy discussed maintenance of water storage tanks, something the district has produced no record of ever performing.
“Are we doing a tank maintenance plan yet?” she asked.
Miller responded that the district had not started tank maintenance.
“The actual maintenance is significantly more expensive than the inspection,” said Miller. “We have a quote and a scope for the repair of the Turkey tank… That’s one that we’re seeking funding for.”
Water board chairman Jimmy Don Kerr announced that state Rep. Bobby McCool was pursuing state funding to renovate the Turkey tank and for other projects.
“He’s going after [funding] and was dealing with the person that does the budget for the state,” said Kerr. “There’s money, so we’re trying to go after it.”
Budget details
The board adopted a $2.98-million operations budget for 2024, including $110,000 from the debt service surcharge that customers pay monthly. Budget expenditures include $2.6 million for operating and $879,247 listed as “other” expenses (customer deposit interest, debt service surcharge, creditor debt, interest expense, amortization and depreciation).
In introducing the budget, Kerr revealed the board conducted a secret private meeting or a series of meetings between board members and Alliance management Tony Sneed, Miller and Hall.
“We all did our workshops with Tony and Craig and Tyler,” Kerr said.
Sneed said there was no rate increase for customers or increase in the Alliance fee in the 2024 budget.
McCoy questioned two items in the capital improvements list contained in the budget. Her concern was $70,000 from Martin County Fiscal Court for a pump station check valve to serve the high school storage tank. McCoy asked if the district already had the funding. Miller informed her that he had spoken with Bell Engineering the previous week and learned the $70,000 figure had increased.
“That number is actually $81,000,” Miller said, indicating an increase of $11,000 over the previous price (and $51,000 over the original $30,000 price reported in September 2021 by the late Judge/Executive Victor Slone).
“Judge [Lon] Lafferty has expressed that he wants to make that happen,” added Miller. “He understands the importance of being able to use the high school tank and that it wasn’t done under the previous administrations that did that project. He wants to make sure that we get that done.”
McCoy also questioned an item titled “Capital Improvements Still Seeking Funding $23,748,000.”
“You know we’ve heard $60 million,” said McCoy, referring to a figure touted by the water district and the Kentucky Public Service Commission in a 2021 rate increase case as the amount needed to fix the water system.
In response, Miller clarified that the figures in the board’s meeting packet were “old numbers.”
“Remember our meeting?” he asked McCoy. “I had the new numbers from Bell. It’s $66 million.”
With no further discussion, board members McCoy, Kerr, John Paul Hensley and Greg Crum approved the budget. Board member BJ Slone did not attend the meeting.
Alliance contract extension
Alliance Water Resources will continue to manage the water district.
Kerr announced the contract extension: “We’re doing it about a year early. Almost as a thank you to them. Out of respect, I would like to extend it.”
The new contract will last five years, from Jan. 1, 2024 to Dec. 31, 2029.
Sneed explained that Alliance already had an automatic five-year renewal. He said renewing the contract a year early would benefit the water district when it begins a cost-of-service study in October and seeks long-term funding for the $1.3 million loan.
“It helps when we go to the PSC if we’re not under the last year of the contract,” said Sneed. “It also helps the staff and their plans for the future.”
Alliance will receive $2,022,084 annually, broken down into monthly payments of $168,507. That amount includes $100,000 for repairs and $110,000 for chemicals yearly.
Board members lauded the Cape Girardeau, Missouri-based company.
“They’ve invested a lot in us, and it seems they’re going to continue to do so,” commented Crum. “It looks as though, the best I can tell, we’re heading in the right direction.”
Hensley commented on the $1.3 million loan the district secured in April 2022 to pay off past-due bills to vendors. In his comments, the board member revealed the loan terms did not obligate the water district to have a management company, contradicting prior statements by the board to the contrary.
“My understanding was when we got that loan, we would be under contract with Alliance,” Hensley said.
Sneed conceded that was the requirement originally.
“I know we had to take that out,” continued Hensley, “but we did vote to do it.”
Sneed again agreed, “Yes, sir.”
The board voted unanimously to extend Alliance’s contract.
Operations, financials
The water district billed $259,722 and collected $249,254 in June. Operations bills amounted to $286,805, including $168,507 for Alliance and $17,800 for debt service funding.
Miller announced that a high-service pump at the water treatment plant was back in service after being inoperable since 2018. He also announced testing results for PFAF (“forever chemicals”) and lithium at the water plant were under regulatory levels.
In June, the district pumped 1.8 million gallons to U.S. Penitentiary Big Sandy.
“We’ve pumped 7 million gallons already this year, more than we pumped all last year to the prison,” remarked Miller.
MCWD produced 41.8 million gallons of water, which Miller called “a 23-year record” low production amount.
“It hasn’t produced less than that since 2000,” said Miller.
According to Miller, from 1993-1996 the water plant produced 31-36 million gallons per month. At the time there were two separate water districts in the county, and the Warfield district purchased water from Kermit. After the two districts merged in 1996, production at the Inez plant increased into the 40s-million gallons range. Then around 2017-2018 production hit 60 million gallons per month.
Water loss
Miller reported that water loss dropped to 62.13% in June, a record low for Alliance.
“Keep in mind it’s a labor of love,” said Miller. “Just because it’s 62 doesn’t mean it’s going to be 60 next month… There’s a little bit of fluctuation ability.”
The water board’s next monthly meeting is scheduled for Aug. 22 at 6 p.m. in the Fiscal Court meeting room on the second floor of the Martin County Government Center.