TheTimesTribune.com, Corbin, KY

February 13, 2013

Financial analysis on CUC’s rates to be done


The Times-Tribune

CORBIN — By Jeff Noble, Staff Writer

The Corbin City Utilities Commission voted Tuesday to authorize General Manager Ron Herd to do a financial analysis of the utility’s retail rates and wholesale water rates.

The retail rates include electric, water and sewer services provided by Corbin City Utilities. Action on the analysis was taken during their regular monthly meeting, held at CUC headquarters.

The analysis will be used to determine if rates paid by the utility’s customers should be raised.

Herd said it had been six years since water and sewer rates were changed, while the electric rates were redone in 2008.

“The electric rates probably won’t change. We just want to balance out the rates where they’re more true to what it’s costing.”

Herd told board members he’s getting bids from three consulting firms from Tennessee to do cost-of-service studies. During the session, he noted the costs of the financial analysis could run anywhere from $30,000-$45,000, depending on the firm’s quotes.

“One firm quoted $12,000 for electric, and $30,000 for a total of $42,000. Most cost-of-service studies tend to be high. They’re consultants.”

When asked by board members his opinion on the analysis, Herd told them he felt a complete analysis of water rates could be done, but not for electric and sewer rates. Herd added he hoped to have the bid information in about two weeks. After a motion was made, the vote was given in favor for him to start the process when all the bids are in.

Among actions taken at the meeting, the board approved paying a lobbying fee of $500 to the Kentucky Municipal Utilities Association (KMUA). Based in Frankfort, KMUA provides services and represents 45 city-owned utilities in the state, including Corbin City Utilities. Board members also approved a motion to authorize Herd to attend the American Public Power Association’s national conference in Nashville, Tenn., on June 15-18.

A pay raise for CUC employees this year was discussed at the meeting. Herd said he would review proposals for the raises and was looking at giving a 1.7 percent increase, which he stated was the Consumer Price Index for 2012. Herd told the board action would be taken during their March meeting, with the pay raise going into effect on April 1.

One CUC project that’s been proposed during the past year is about to begin. In his General Manager’s Report, Herd said that while one easement has not been signed for the KY 1232 Sewer Extension Project in Knox County, the project would be bid with the section affected by the easement bid as an alternative. A bid opening for the project is scheduled for early this spring. A total of $1.29 million in state and federal grants will be used to fund the project.

Another project that went on over the past 12 months is about to end, with the 2011 Sanitary Sewer Rehabilitation Project all but done. The project’s contractor has been paid $1.32 million, with $69,983.75 being held in retainage, which will be held until the contractor furnishes post-construction videos of the project. Once that’s taken care of, the project would be closed out.

His report also listed the Old Trickling Filter Mercury Removal Project at CUC’s Wastewater Treatment Plant as completed, and the contractor submitted a final pay request to CUC’s consultant for approval. So far, the contractor has been paid $145,105.61 for mercury abatement at the plant, with the consultant being paid so far $91,129.05, which includes initial site assessment, closure plan preparation, abatement project administration and inspection. Herd reported the total cost of the project to be around $265,000, with the money coming from CUC funds.

On the CUC’s Wastewater Treatment Plant Flow Upgrade Project, Herd said the engineer with the firm GRW Inc. was working on the engineering reports. In addition, personnel with GRW and CUC have tentatively scheduled a meeting Wednesday (today) to review the project’s progress and to discuss options.