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RELATED STORY: City Council Objects to AWA Rate Study

On August 27, 2012, the Jackson City Council voted 5-0 to send a letter to AWA objecting to AWA’s proposed consolidated rate increase. If the council doesn’t receive what they consider a satisfactory response, then they will consider hiring an independent auditor.

The City’s main objection is that AWA is charging Jackson $19,196 annually for the cost of the Plymouth Pipeline. The City’s water does not travel through the Plymouth Pipe and AWA told the City years ago that they would not be expected to pay for the pipeline. More...

Jackson To Pay Over $19,000/Year for Pipeline They Don’t Use

On August 14, 2012, City of Jackson leaders met with AWA to discuss AWA’s latest systemwide rate plan, which requires Jackson to pay $19,196 per year for debt service on the Plymouth pipeline. Jackson does not use the Plymouth pipeline, and were told before it was built that it would not cost them anything. Now that the pipeline is complete, AWA consultant Bob Reed has devised a new rate study that requires Jackson to pay part of that cost.

When the financing for the pipeline was arranged, Plymouth was to pay 65% and AWA 35%. Jackson was exempted because water goes to Jackson from the Tanner Water Treatment Plant (TWTP) in literally the opposite direction from the pipeline to Plymouth. The reason Reed changed his mind about whether Jackson benefits from a pipeline to Plymouth is the philosophy of systemwide consolidation.

Jackson representatives were presented with a table showing a net $5,124 benefit to Jackson because of the Plymouth pipeline. AWA and Reed reason that Plymouth pays a portion of the debt service and operation and maintenance for both the ATL and TWTP, and that reduces Jackson’s payments. If that is true now, it was also true in 2007.

Furthermore, the operation and maintenance costs in question are almost all for the treatment of the water. The ATL is a big pipe buried in the ground and needs almost no maintenance. The cost of water treatment is supposed to be proportional to the amount of water treated, so Plymouth paying for operation and maintenance does not really benefit Jackson. The plan for the ATL was for new users to share in the cost. There is no reason for Jackson to subsidize a pipeline that takes water in the opposite direction; there is no benefit there.

All of the figures presented by Reed are based on the AWA budget approved for the 2012-2013 fiscal year. When asked why the actual figures for 2011-2012, which reflect the recent staff reductions, were not used, Reed and Mancebo asserted that AWA is currently in “emergency” mode. That is not consistent with the discussions in public meetings, nor the fact that AWA personnel have been recently assigned to work on non-budgeted projects.

Over the last year, AWA staff has asked for two additional positions. One was in the engineering department, because applying for and servicing grant applications is interfering with the ability to do other work required to maintain the systems. The other was a clerical position to deal with public record requests. Neither of those positions affects the operating and maintenance costs of the ATL and TWTP. Apparently AWA’s “emergency” is not serious enough to alert the Directors, but is sufficiently serious for high estimates to be used instead of actual costs.

RELATED STORY: Council Objects to Rate Study