If you are one of Limestone County Water & Sewer Authority’s 22,000 residential customers, you’ve noticed a steady rise in your water bill.

What you may or may not know is how your bill compares with those in neighboring counties. The fact is, you’re paying more.

The LCWSA board voted in 2014 to increase the minimum residential usage rate from $20 to $25. It also enacted automatic 5-percent increases set to last through at least 2024. The board voted in September, however, to nix the increase for the 2017-2018 fiscal year.

How does that $25 base rate compare to other water systems? Here’s a look at inside water rates as compiled by the Alabama Department of Environmental Management:

• Ardmore: $15;

• Athens Utilities: $11.70;

• Decatur Utilities: $9;

• Florence Utilities: $14.31;

• Florence Utilities-Killen: $24.03;

• Harvest-Monrovia Water and Sewer Authority: $17.26;

• Huntsville: $10.84;

• Madison County: $10;

• Madison Utilities: $6; and

• West Morgan-East Lawrence Water and Sewer Authority: $5.20.

A customer’s final bill is determined by how much water was used. A customer who uses 3,000 gallons pays $32.62, while a customer who uses 4,000 gallons pays $40.24. By comparison, a Decatur Utilities customer who uses 4,000 gallons of water per month is charged $15.61.

How bills are figured

LCWSA CEO Daryl Williamson explained the water bills have two components. The $25 covers the flat rate, the cost of reading the meter, the cost of the meter, postage for the bill and debt service. There’s also a volumetric portion, which is what customers are billed per 1,000 gallons. The volumetric component of the bill covers operations and maintenance of the system.

The LCWSA currently has a debt of $96 million.

Williamson said for every dollar a customer pays to the utility, it is broken down like so:

• 53 cents to operations and maintenance;

• 23 cents to interest on debt;

• 14 cents to debt principle; and

• 10 cents that is reinvested into the system.

Reasons for the debt

How does a rural water system accrue $96 million in debt? There are more than a few reasons why, but Williamson offered the simple explanation that money was borrowed to pay for capital infrastructure. The LCWSA’s current outstanding bonds date back to 2010.

“Was the debt necessary?” Williamson asked. “In the utility sector, it’s very common to issue bonds to pay for capital infrastructure. The reason why utilities do this is so debt is being paid by those using the asset at the time of the payment.”

The alternative would be that the utility build up a cash reserve and pay for necessary projects as they occur, Williamson said, but LCWSA then runs the risk of a system breakdown that could impact customers on a long-term basis.

“That would mean customers would not receive beneficial use of an asset they paid for,” he said.

Williamson acknowledged, however, the LCWSA board has invested heavily in building a “robust system.” Barney Fullington, a consultant with Franklin, Tennessee-based Inflo Design Group LLC, told the LCWSA board in September it had built out its infrastructure more quickly than it picked up new industrial and residential customers.

Board Chairman Jim Moffatt agreed with the assessment and said the utility had “bought a Maserati to drive around a quarter-mile race track.”

The board was influenced by long-term growth projections developed by engineering firm Hethcoat and Davis. The board voted earlier this year to cut ties with the firm and engineer Alton Hethcoat. The LCWSA had paid $6.7 million to Hethcoat and Davis since 2008, according to figures provided by the authority.

Another costly move by the LCWSA was the $21 million Decatur Crossing project. That project involved running a pipeline under the Tennessee River to Decatur Utilities.

The pipeline gives LCWSA the means to purchase up to 7 million gallons of water per day from Decatur Utilities. The project is set to be completed in the first quarter of 2018.

Looking forward

When asked if he could foresee a time when LCWSA would drop its residential rates, Williamson said that scenario would be unlikely. He’s more interested in freezing the rates at the current level and letting other utilities catch up.

“With our debt load and necessary (operations and maintenance) we need to perform on the system, I don’t see us going backward,” he said. “I see us maintaining the system as we have it today and meeting the needs of growth.”

Williamson said despite higher bills, customers should appreciate the utility’s efforts to ensure reliability and curb waste. The LCWSA has also implemented a stringent leak detection program and stepped up maintenance and asset management efforts.

“We want to find those problem areas in our system before a complete rupture or catastrophic failure,” he said.

Early challenges

December will mark the one-year anniversary of the Limestone County Water & Sewer Authority board’s decision to hire Daryl Williamson as its CEO.

A resident of Pulaski, Tennessee, Williamson was no stranger to public utilities. He previously served as director of customer service with Columbia Power & Water Systems in Columbia, Tennessee and worked as vice president of customer service for Pulaski Electric Systems.

He was brought on board to helm LCWSA after a tumultuous several weeks. In October of last year, the LCWSA board voted to fire four employees, including general manager Byron Cook and assistant general manager Greg Holland. The board claimed the terminations boiled down to an effort to save the utility $300,000.

Cook and Holland then filed a civil suit against the LCWSA board members, LCWSA attorneys Mike Cole and Mark Maclin and Limestone County Commission Chairman Mark Yarbrough. Cook and Holland also filed an ethics complaint against Yarbrough, which was later dismissed by the state ethics board.

Cook and Holland claim the LCWSA board members — Mike Hardaway, John Farrar, Ty Smith, Johnny Hatchett and Chairman Jim Moffatt — conspired to fire the men. Specifically, they claim Yarbrough ordered Cook’s and Holland’s firing because Yarbrough was angry at Holland for downgrading the job review of his son, Ben Yarbrough, a LCWSA employee. They also claim Yarbrough was angry that Cook would not fire Holland for doing so.

Ben Yarbrough filed a related civil suit Nov. 2 on the basis that information released as part of Cook and Holland’s lawsuit damaged his reputation. He believes his reputation was damaged by the assertion in Cook and Holland’s filing that Yarbrough was hired by LCWSA “in spite of a criminal background check that would have likely prevented hire of a similarly situated applicant.”

Just four months into his role as CEO, Williamson learned about a 30-year franchise agreement with the city of Huntsville that was set to expire in May. Board members claimed they knew nothing about the agreement.

LCWSA could lose millions in future revenues and existing infrastructure in what is now mostly Huntsville-annexed Limestone County. The service area potentially up for grabs spans from south of the CSX line in southern Limestone to Interstate 565. The corridor has been eyed by both Limestone County and the city of Huntsville as a continued hotbed of future development. An existing business in the area, Cintas, is also LCWSA’s top customer.

Williamson couldn’t provide an update on the situation in a recent interview with The News Courier. He said terms of the agreement are still being worked out behind the scenes.

A little more than a month after the franchise agreement came to light, LCWSA learned it owed the city of Huntsville thousands of dollars in unpaid sewage-treatment expenses.

After the sale of sewer line to Huntsville, LCWSA gave Huntsville time to get its affairs in order before taking the system over. After the switch was made and Huntsville began treating sewage, LCWSA continued to collect a sewer fee from affected customers but had not remitted payment to Huntsville. The practice went on for about two years.

In September, the LCWSA voted to pay Huntsville $567,706.20 to meet its financial obligation.

Despite the challenges he’s faced in his first year, Williamson is excited about the future of the system and plans that have been implemented. He said the utility has renewed its focus on quantifying which projects are priorities and which projects can wait.

“We have 22,000 customers, but Limestone County is a huge county and we have 1,300 miles of water mains,” he said. “We have a tremendous amount of growth in our county. The water supply for Limestone County is set for the next several decades, and our infrastructure is robust enough to handle the next several decades.”