Elkins Mayor Duke Talbott received word on Wednesday that the city of Elkins was approved for $15.5 million from the West Virginia Infrastructure and Job Development Council for the new water treatment plant and distribution system upgrades.
"We got the $15.5 million at 1 percent interest that will replace half the money from RUS (Rural Utility Service)," Talbott said.
The city decided to seek new funding for the plant in an effort to save money on interest. In 2008, the city was awarded $28 million from the USDA Rural Utility Service to fund the project, but at an interest rate of 3.75 percent. Talbott said the money from the Infrastructure Council will be combined with $15.5 million from RUS at an interest rate of 2.75 percent. Talbott said the city is saving 1 percent in interest from RUS.
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Talbott
"We went from 3.75 percent interest to less than 2 percent in interest," Talbott said. "The new funding will save the city in excess of $14 million in interest rates."
He said the savings is important because it can be passed on to the water customers in the city.
"We can keep rates lower and our rate increase council considering is was based on receiving the money," he said. "We will have to pay back so much less."
The city will have 40 years to pay back the money with the first two years being a grace period.
Talbott said the water rate increase being considered at today's Elkins City Council meeting would have been higher if the lower interest rate money would not have been obtained. The first part of the increase is a going level increase to bring the water fund into the black and the second will be to help pay back the money and will not go into effect until construction on the new plant is complete.
Currently, customers pay $8.34 per 1,000 gallons for the first 2,000 gallons of water; $4.45 per 1,000 gallons for the next 3,000 gallons, $3.84 per 1,000 gallons for the next 5,000 gallons of water and $2.56 per 1,000 gallons for any usage over 10,000 gallons.
Under the first step of the increase, customers will pay $9.50 per 1,000 gallons for the first 2,000 gallons of water; $6 per 1,000 gallons for the next 3,000 gallons, $3.52 per 1,000 gallons for the next 5,000 gallons of water and $3.06 per 1,000 gallons for any usage over 10,000 gallons.
Under the second increase after construction is complete rates would be: rates after construction would be $12.25 per 1,000 gallons for the first 2,000 gallons of water; $9.90 per 1,000 gallons for the next 3,000 gallons, $9 per 1,000 gallons for the next 5,000 gallons of water and $5.57 per 1,000 gallons for any usage over 10,000 gallons.
The rate ordinance will have to pass two readings by Elkins City Council and then be sent to the West Virginia Public Service Commission for approval. If the rates are protested the WVPSC has 270 days to act on the rate.
City council will meet at 7 p.m. today in council chambers at city hall.
Contact Anthony Gaynor by email at agaynor@theintermountain.com.
