BY LISA STAYTON
MOUNTAIN CITIZEN
INEZ — Martin County Water District projects a rate increase in 2026.
The water district addressed the rate increase question and others in response to the Kentucky Public Service Commission’s recent request for documents and answers “under oath.”
The PSC’s request, outlined in a June 18 filing signed by Executive Director Linda C. Bridwell, P.E., is part of the regulatory agency’s ongoing monitoring of MCWD’s compliance with prior orders, financial management practices and adherence to regulatory directives.
Among five specific inquiries, the PSC questioned a $68,000 withdrawal from a bank account Jan. 19. In its response July 10, MCWD explained the amount was transferred to another account and used to pay its contract manager, Alliance Water Resources.
Regarding the PSC’s query about detailed quarterly statements of debt service surcharge (DSS) billing, collections, payments and outstanding amounts on past-due debts for each vendor receiving payments, MCWD clarified that its first-quarter report to the PSC included the information.
In its third request, the PSC asked MCWD to state why it no longer explains in its monthly reports the reason parts cannot be obtained from a source other than Evans Hardware of Inez. The PSC also asked why parts were not kept in inventory as required by a July 22, 2020 PSC order.
MCWD stated in its response that it did not make purchases from Evans during the first quarter of 2024. The water district added that it maintains an inventory of frequently used repair parts.
This reporting directive stemmed from Evans Hardware carrying MCWD through its most financially challenging years from 2015 to 2020. The water district ran up charges at the hardware store totaling more than $49,000 before interest. When requested, the hardware store provided the PSC with all invoices, each signed by water district personnel. The invoices went unchallenged by the PSC or MCWD.
Evans voluntarily waived all interest charges on the past-due amounts in July 2020 and did not add interest after that. However, MCWD would take two more years to pay Evans and a list of other past-due vendor bills amounting to more than $1 million. The district achieved this debt pay-off by issuing securities and refinancing two long-term loans for $1.3 million.
Singling out the Inez business, the PSC has required MCWD to file monthly reports since July 2020, resulting in monthly legal costs. Though the original PSC order of July 22, 2020 applied only to MCWD, the regulator amended the order Oct. 6, 2020. The amendment requires MCWD to file a joint monthly report with Alliance “explaining their continued purchases from Evans Hardware.”
This order is despite the fact that MCWD’s attorney Brian Cumbo previously requested the PSC forego the reporting mandate. Cumbo pointed out that MCWD contracts with Alliance and does not make purchases outside the scope of its contract (legal, insurance, auditing).
The PSC also requested monthly water loss reports for January through June 2024. MCWD provided data showing a significant improvement in the June rate. Those reports include:
January: 74.86%
February: 67.37%
March: 75.09%
April: 73.83%
May: 68.47%
June: 62.43%
In response to whether MCWD plans to file for a rate adjustment within 2024, the district confirmed it does not intend to do so. As for a timeline for a rate increase the district stated in its response: “The draft budget for 2025 allows the district to maintain the current rates with tight management practices and the assumption that the raw water intake project will be completed soon. However, the district is projecting a rate increase will be needed in 2026 and will be heavily influenced by the timeline of completion for other capital projects such as the meter replacement program.”