Regionalization Success Story - PowerPoint Presentation

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Regionalization Success StoryMcDowell County Public Service District

Mary HutsonState Coordinator

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The southernmost county in the WVCovers 535 square milesThe county is roughly in the shape of a semi circle, with its borders following the Appalachian Mountains

Popularly referred to as the "Free State of McDowell“ or “The County”McDowell County

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Most notably known forHomer Hickman-NASASteve Harvey-TVGordon Lambert-NFLCurrently President of the McDowell County Commission

Bobby LewisFormer USDA WV State DirectorMcDowell County

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1913-Public children’s playground from private donation1923-Memorial building in US, dedicated to World War I

1928-African American woman legislatorMinnie Buckingham Harper appointed to WV House of Delegates to fill vacancy after death of her husband 1941-Municipally owned parking garage1960-In total coal production in US1961-Issuance of federal food stands

Firsts4

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Located in the heart of Appalachia A mountainous region with a colorful and complex history

From the 1920’s through the 1950’s, the area was fueled by coal mining moneyEven at the beginning of the coal mining industry, when the companies shipped families in to work and live in these hills, communities became dependent upon the company for everything - their livelihood, their homes, even the groceries they bought at the Company store.

McDowell County & Coal5

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The Company built the infrastructure of the coal camps, bought up all the land in the mountains, brought in the doctor, and built the schools and churches. They provided everything to support the workforce.

The economy was wholly dependent upon coal.6

McDowell County & Coal

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A coalfield map of McDowell and surrounding counties. Coal Companies

(Image: coalcampusa.com)

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Mountainous regions like southern West Virginia have an abundance of water, but the terrain creates challenges Many

of these communities were constructed from scratch in and around the v-shaped hollows, which split the wooded mountains that blanket this region’s landscape.Infrastructure Challenges

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By 1950 McDowell County had a population of 98,887Communities were still isolatedPopulation mostly in

Coal CampsAll services, including drinking water, were provided by the Coal Companies

Boom Times 9

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By 2000 the population dropped to 27,329, a ~ 72% decline from 1950 to 2000The Coal Was Gone !Over forty small Coal Camp communities were still in placeAs mining companies close, water systems fail As the mining industry here weakened, coal company water systems changed hands

Coal’s Legacy in Appalachia

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Most Coal Company water systems were soldEither to the community or to a private entityThe private operators who took over systems from the coal companies often neglected upkeepCustomers were charged flat rates for poor service and even poorer quality

Systems were poorly maintained and the water was unsafe These people ran them not putting the revenue back into maintenanceCoal’s Legacy in Appalachia

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By 1971, a private utility known as McDowell County Water Company controlled water service in Coalwood and Caretta and 12

other communitiesThese water systems were already nearing the end of their usable lifespans and that the company allowed them to deteriorate further.

McDowell County Water Company12

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1987 Olga Coal Company Owner/Operator filed bankruptcy and shut down all mining operationsSold the McDowell County Water Company (private)Resulting in unacceptable water quality

Coalwood = IronCaretta = Manganese

Fall of McDowell County Water Company13

Water at the Caretta plant

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Repeated complaints to McDowell County Water Company achieved no resultsGoing without water or boil water advisory is a way of life for some people in the coalfields.Angry customers refuse to pay water billsOther continue to retain right to complain about services

All customers were forced to haul water for daily household needsFall of McDowell County Water Company

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The mountain spring in Maybeury is often crowded with folks gathering water for their homes.

Fall of McDowell County Water Company15

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Community residents lead by Frankie Rutherford resolved to take legal and political action to secure clean water for McDowell CountyWith the pro bono assistance of a local attorney, BCPIA goals were to force McDowell

County Water Company to fix the existing supply problems, and to seek compensation for damages to fixtures and appliancesBig Creek People in Action (BCPIA)

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March 1989-WV Public Service Commission (PSC) found McDowell County Water Company to be:“Providing grossly inadequate water service to its customers”The management and operation to be “inadequate, inefficient, and irresponsible”

The ownership and officers, unresponsive to the needs of the customers. The court ordered the company to take specific steps to remedy this situation

Fall of McDowell County Water Company17

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October 1989-little had been accomplished by the water company, the Commission found McDowell Water to be “irresponsible” and “unresponsive”

Ordered receivership proceedings begun against the companyAbsentee owner/majority stockholder of the company was found guilty on seven criminal misdemeanor

countsThe company owner was fined $500 and sentenced to serve 90 days home confinement on each count, to run consecutivelyFall of McDowell County Water Company

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Company assets were turned over to the McDowell County Commission, the only existing form of government for the small unincorporated communities in the service region.

The Commission was initially inclined to place the water system in the control of another private operator, but BCPIA was vehemently opposed to this ideaMcDowell County Commission

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Bobby Lewis, McDowell County Commissioner, recommended that communities would be better served by retaining local control through the organization of a Public Service District (PSD) under the auspices of the County Commission

PSDs are public corporations established by county commissions with approval of the WV PSC to develop and maintain water systems

Formation of McDowell County Public Service District20

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Centralized management, billing and record keeping Eliminate need for highly trained people at every community Larger customer baseAbility to

hire and keep skilled employeesBetter access to fundingAble to seek state and federal funding for rehabilitation and extension of the system

Why a Public Service District?21

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McDowell County PSD was established in 1990 after a long series of hearings which several members of the local commission resisted undertaking this responsibility. Frankie Rutherford, one of the prime advocates for a solution to the region’s water problems was appointed as Director of the newly formed district, and became one of three members of the oversight board.

Formation of McDowell County Public Service District

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Three Board Members appointed by the McDowell County Commission for 2 to 6 year terms.Regulated

by the West Virginia Public Service Commission.Continued to acquire and upgrade other small communities as money is made available

Governing Body 23

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The new District found itself in possession of failed water company’s assets and infrastructure disaster. The PSD began operating 10 water systems serving 14 communities.

Initially six employees, of which only 1 was certified4 field staff2 office staffMcDowell County PSD

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Working together, the PSD applied makeshift solutions to the most urgent problems until funding could be obtained to provide long-term remedies.

System personnel had to travel 120 miles each day just to check the small treatment plants. And forget water loss percentages! Just keeping water in the decaying lines is a triumph.

It is a minute by minute struggle most of us could never envision.McDowell County PSD25

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1992-New water systemThe first new water systems were constructed for Caretta and Coalwood, the worst cases, with the aid of federal funds obtained from the RUS program. Almost overnight 350 households had access to something most people take for granted, a dependable supply of safe drinking water.

1993 - all 14 communities in the Big Creek service area had been provided with potable water and reliable service.Timeline

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1999-purchased the failing Iaeger City Water 2004-accepted responsibility for

Big Four PSD2007-accepted responsibility for the private water systems Kimball and Elkhorn2009-Jolo/Paynesville Project Phase I & II-upgrade Bartley WTP new service to Jolo & Raysal2010-Anawalt’s water source diminished to point where it could no longer supply the town

2012-Jolo/Paynesville Project Phase III & IVNew water service from Bradshaw mountain to PaynesvilleTimeline

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2014-Elkhorn Water Project-Phase I brought a new water system to Elkhorn, Maybeury and Switchback2016-Crumpler and Ashland-assisting with O&M, due to no certified operator- not official customers

Timeline

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Elkhorn Water Project-Phase IElkhorn water tower believed to be at least 60 years old.

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The Maybeury Plant30

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Intake at 31

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Maybeury Intake Building

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Future ProjectsElkhorn Phase II - will also replace systems in Northfork and

Keystone with water from the Maybeury plant Keystone have been on a boil water advisory since 2010Northfork has been under an advisory since 2013

Elkhorn Phase III - will replace the Kimball plant with water from the Maybeury plant and upgrade water lines to the county line33

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Future ProjectsPhase IV – provide service to customers up Northfork hollow, which will include Ashland & Crumpler

Both Water Associations which are roughly 26 miles from Coalwood

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About 26 miles east of Coalwood, a former coal mining community has 26 customers (population of about 40 to 50)When the company shut down in 1979, the community took over

George Oster has lived there since 1944 and been involved since the beginninglocal residents maintain the water system on their own, but expect that the public service district will soon take it over—a positive development in his view.

Ashland & Crumpler35

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Oster said he’s been involved with Ashland Community Water since it beganCurrently 26 water customers in town

Flat fee of $15 a monthNo metersWater comes from the abandoned No. 3 mine, it’s chlorinated and flows into a storage tank.

The system is all gravity fed, no pumpsOster is certified and takes compliance samples and monthly reportingAshland & Crumpler

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When something breaks, one resident is the maintenance man Someone in Crumpler, a community up the road, has a backhoe that can be used to dig up deep water lines.

We just take care of our own leaks and everythingOster moved to North Carolina in late 2016

Ashland & Crumpler37

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Since its inception, the McDowell PSD has continued to expand its role in the countyTaking over and upgrading small private community systems in trouble, one or two at a

timeBuilding new treatment plants when neededOften using groundwater extracted from deep abandoned mines

The PSD’s customer base has grown to about 3,064 from around 500.It now operates 16 water systems.McDowell County PSD’s 2018

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Three New Treatment Plants Were Constructed to Replace 8 Old Plants, And Serve 16 Communities. Nine Communities Were Connected to Three Existing Treatment Facilities Owned

and Operated by Entities Other Than the PSD.The PSD also Operates 2 Other Treatment Plants Which Were Turned Over to Them by the Public Service Commission, After Being

Placed in ReceivershipTechnical Capacity39

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The PSD's water system consists of Approximately 769,691 feet (146 miles) of 12-inch and smaller water

line26 water storage tanks23 booster pumping stationsNumerous valves

, fire hydrants, individual customer services and other related items. Technical Capacity40

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The PSD’s AssetsA significant amount of maintenance and construction equipment including

:An excavator2 BackhoesA dump truck2 equipment trailers

As well as such smaller items The service fleet includes 9 various sized vehicles fitted with a radio to maintain excellent lines

of communication between all employees throughout service area.Technical Capacity41

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The District takes great pride in the quality of its operations. It has established

programs to monitor such critical, but often over looked, aspects of its operations such as water accountability, meter testing, inventory control, vehicle O&M expense, etc. To

extend the life of its systems and improve reliability the District has developed and implemented an aggressive preventive maintenance program. Managerial Capacity

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The District has computerized and integrated its payroll, billing system and other financial records. The computer system is networked and sized to handle projected growth

for many years. Meters are being converted to "touch read" and "radio read" as funds allow to further improve accuracy and efficiency. Approximately 700 of the District's meters have been converted to date.

Managerial Capacity43

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Financial challenges exist as well. As the district has made upgrades, borrowing has stacked up, much of it in the form of loansThe district’s most recent annual report shows that in June 2016

it had $7.4 million of long-term debt, roughly quadrupling from its 1999 level of $1.7 million. Operating revenues during the district’s 2016 and 1999 fiscal years were around $1.8 million and $612,000 respectively.

Financial Capacity44

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We have a tremendous amount of loan debt,” Brewster said, adding that monthly payments total about $32,000She didn’t seem panicked about the district’s debt load The district charges $26.84 per month for up to 2,000 gallons of water.

Financial Capacity

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O&M alone for the 16 water systems the district oversees amounts to a tall orderThese individual systems, spread across the county, create additional burdens with reporting and water

samplingJust performing daily systems checks requires workers to drive about 300 milesFinancial Capacity

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The District has, for the previous several years, been making decisions based upon its twenty-year plan in order to prepare for expansion into additional areas.

Planning for the Future47

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The District Board has a combined total of over 20 years of service and is comprised of highly motivated business oriented individuals. The District employs a knowledgeable and experienced individual as its General Manager.

It's Staff of 15 includes 8 water system operators with over 75 years of combined water system related experience.

The Experience48

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Of the 15 employeesThe office staff consists of 2 people who handle billing, collection and all bookkeeping from a centralized locationThe field staff consists of 12 people, including a manager, who also operate from a centralized location

The field staff is responsible for plant operation as well as distribution system O&MPSD Staff

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District personnel are experienced in the planning and implementation of extensions to its systems. Since its creation in 1990, the District has completed 14 major water projects.Essentially all of these projects were completed on time and within or below budget.

The District has identified 4 additional water projects and is proceeding with implementation as funding allows.

The Experience51

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The PSD has adopted the strategy of identifying as many potential projects as possible, then pursuing funding for all of them at the same time.

Projects and potential funding sources are "matched" based upon each project's perceived qualifiers.USDA-Rural Utility Services (RUS)Abandoned Mined Lands (AML)Small Cities Block Grant (SCBG)

Appalachian Regional Commission (ARC)Economic Development Administration (EDA) Accomplishing a Goal52

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“USDA Rural Development has been a player in every project that we’ve done,” Brewster noted. “That’s probably the one that for us is used the most.”If funding is not forthcoming from the initial source, an alternate source is identified and pursued. This aggressive approach

has worked well in McDowell County; however, it requires a great deal of hard work and flexibility.Accomplishing a Goal

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Beginning in 1990 When McDowell County PSD was Formed, to Present, app. $25 Million Dollars Has Been Spent.

Of That Figure, app. $17.8 Million was Grant Monies From Several State and Federal Agencies With RUS, the Old Farmers Home Administration Being

the Largest Player.Also, app. $7.2 million dollars was loaned by RUSThe Cost

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Tap or connection fees are $300.00 per householdWater is sold for $9.30 per thousand gallons Minimum bill is $29.70 per month which allows a household to use up to 3000 gal. In

West Virginia the average use per household is 4,500 gal per monthWhat the Customer Pays

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Excellence in Customer ServiceProfessional managementOperational excellence in system operationsRegulatory compliance with local, state and federal regulations

Implementation of industry best practicesTechnical expertise with a commitment to technical training and certification for employeesForward looking as evidenced by long term planning for operations, capital and growth

Operating Philosophy and Values56

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Financially strong in managing revenue, expenses, assets and liabilitiesCost based rates for water utilitiesFuture interconnections between communities where beneficial

Commitment to capital improvement plans for system operations with internally and externally generated funding to ensure long term viabilityCommitted to safety in operations and in enhancing public safety for the communities through improved water quality and fire protection

Operating Philosophy and Values

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We’ve been pretty aggressive in the county about trying to provide water to as many residents as we possibly can,” Brewster said.There are still pockets of the county that do not have access to public water, or that have poor quality water, according to Brewster.

GM’s Prospective

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The PSD currently provides water service to approximately 3,064 customers in 32 communities which range in size from 9 to 250 homesCoalwood, Hemphill, Capels, Havaco, Wilcoe, Pageton, Skyrusty, Premier, Berwind, Rift, Canebrake, Valls Creek, Squire, Newhall, Cucumber, Bishop, Iaeger,

Raysal, Atwell, Bartley, English, Yukon, Buchanon, Caretta, Big Four, Belcher Mountain, Jolo, Kimball, Carswell, Vivian, Tidewater, Eckman and surrounding areas of McDowell County

The End Result59

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PSD Office

Water Plants

Existing Systems

Proposed Projects

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The McDowell County Public Service District has worked for 27 years to improve and maintain infrastructure that provides drinking water to people in remote corners of the state.79% of the population of McDowell county is served by the public water (15,205 out of 19,141

)10,988 of the 15,205 (72%) are served by McDowell County PSDI believe we can call this a SUCCESS!

The End Result61

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Contact Information:

Mary Hutson

304-542-3122

maryhutson@suddenlinkmail.com

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