Four-thousand dollars is the price the Town of Mineral will have to pay before they can even begin negotiating to settle a suit out of court.
The Louisa County Water Authority board of directors sent a letter to Mineral Town Council on June 17 outlining responses to six key issues facing the two agencies. The pair have been locked in a battle over past due water bills.
In the letter, the LCWA board of directors unveiled options to resolve the dispute stemming from a pending lawsuit filed April 28 in circuit court.
“All options require payment, in full, of all past due balances,” the letter states.
Pam Baughman, general manager of the water authority, and Mineral Town Manager Sal Luciano met for two hours on May 22 to discuss the suit against Mineral for unpaid water fees, late fees and interest.
Luciano came up with six “major topics” that Baughman agreed to take back to the water authority for discussion at its June 10 meeting.
The water authority discussed the matter in closed session.
“The board directed me to draft a letter,” Baughman said. “Interim Louisa County Attorney Mike Lockaby was present by conference call.”
In the letter, the authority proposed one of two monthly minimums options. The first would be to maintain the current monthly minimum of 129,000 gallons per month at $5.50 per 1,000 gallons. This results in a monthly cost of $709.50.
The alternative would include the town paying for water based on its meter size. A four-inch meter provides a minimum of 204,000 gallons of water, which costs $1,122 per month.
Other points of contention between the town and water authority centered around rate controls, connection fees, timelines for rate increases, board representation and hydrant flushing across from Mineral Restaurant.
The water authority wrote it’s “unwilling to include language from an old agreement into a new agreement.”
The town had hoped to tweak the contract to stipulate “water rates charged the town of Mineral under this contract will never exceed 100 percent of the cost of operation and maintenance of the system and the cost of producing the treated water exclusive of capital costs, debt retirement and repayment of principal,” according to the letter.
“The authority board’s goal is to provide the best quality product at a fair, reasonable and just cost,” Baughman said. “Utilities are not set up to make a profit, but we must cover operation, maintenance and regulatory costs.”
In terms of connection fees, the town currently pays a wholesale connection fee to the water authority when connections are made to the system.
“Even though the town only supplements their water system with authority water, the (LCWA) is required to provide an ‘allocation” to ensure we have capacity to serve them in times of system failures,” the letter states.
The water authority supplied two options to solve the current dilemma. The first would be to continue to pay for connection fees based on wholesale rates when connections are made.
The second option offers to have the town pay the connection fee for a four-inch meter at the current rate schedule of $131,250. The water authority would provide a credit of $84,000 for dues paid to date, leaving the town to pay the remaining balance of $47,250.
To read the entire story, see the July 2 edition of The Central Virginian.