PSD Asks For $2.5 Million Advance on Slaty Fork Project

By Drew Tanner

In a special meeting Thursday evening, the Pocahontas County Public Service District voted to take two major steps in moving forward with the regional sewage treatment plant proposed for Slaty Fork.

The PSD is asking for a $2.5 million advance on the $9.5 million loan the state's Infrastructure and Jobs Development Council has pledged toward the nearly $20 million project.

Additionally, the PSD voted to take over wastewater treatment operations at Snowshoe Mountain Resort before the regional plant is constructed, in hopes of using the revenue from resort customers to cover the cost of evaluating a different site for the controversial treatment plant.

The special meeting, held just five days before the PSD's regular meeting, was necessary because the $2.5 million request had to be filed with the IJDC by Friday, said PSD attorney Tom Michael.

Michael gave board members a quick run-down of the budget for the $2.5 million requested from the IJDC. More than half of the money, $1.3 million, will go to Thrasher Engineering.

The Clarksburg-based engineering firm has already done $900,000 in design work on the project, said Michael. An additional $400,000 has been budgeted for engineering design, including the collection system of pipes and pumps, compliance with tighter restrictions placed on the plant by the Department of Environmental Protection and a redesign to fit the plant on an alternative site, the attorney said.

The next-largest chunk of money will go to project administrators and legal fees.

Michael's total tab for the project is estimated to be $194,000.

Another $150,000 is earmarked for the project coordinator position created by the PSD earlier this year. The board has said it will hire Slaty Fork resident Kermit Friel for the position once it has the money. The $150,000 will cover the coordinator's salary and benefits for two years, said Michael.

The Region IV Infrastructure and Jobs Development Council will receive $100,000 for project administration, while $151,000 is budgeted for the project's bond council, Charleston-based Steptoe & Johnson.

Other budget line-items for the $2.5 million include $130,000 for "land acquisition," paying off the $177,000 the PSD has drawn on its line of credit with Pendleton Community Bank and $270,000 earmarked for contingencies.

In February, the PSD sent a letter to state Senator Walt Helmick requesting $25,000 to explore alternative sites and $50,000 to fund a site coordinator for one year.

"We might get some money from Senator Helmick, but instead of waiting around on that, we're moving forward with this," Michael said Thursday evening.

"I think this is an obvious step to move forward with the project," said PSD treasurer Mark Smith, who moved that the board make its request to the IJDC.

Board secretary Scott Millican seconded the motion, which passed unanimously.

The $2.5 million is expected to cover project costs until the PSD closes on the financing for the project and puts out bids for construction, which Michael said he anticipates will happen within two years.

The money won't come as a lump sum, but rather, the PSD will request money as costs are incurred, said Michael. However, some of that money has already been spent, according to Michael.

Michael's own work on the project since 2002 has cost $94,000, while Steptoe & Johnson and Region IV have each done approximately $50,000 in work on the project, the attorney said.

Thrasher's bill already totals approximately $900,000, said Michael.

The PSD's financial move will be coupled with its takeover of Snowshoe Water & Sewage's wastewater operations.

Snowshoe's wastewater treatment facilities are estimated to be worth approximately $2 million, according to project documents.

In addition, the PSD's operation of the facilities will bring in between $33 and $180 per month from each of the resort's approximately 1,800 customers under the interim rates approved by the West Virginia Public Service Commission in December, 2005.

The original PSC-approved transfer agreement between the PSD and Snowshoe had three phases.

The first phase included inspection of the resort's sewage collection system, which Michael said has already been completed.

Under phase two, the PSD would have acquired the resort's collection system and customer base. Snowshoe would have kept the treatment system and billed PSD for sewage treatment.

Once the new regional plant went into operation, the agreement would enter phase three, with Snowshoe ending its wastewater treatment operations and the PSD paying the resort $431,000 for reclamation of its treatment lagoon. The PSD spent about 20 minutes in executive session discussing some of the details of the new transfer agreement, saying it related to "acquisition of real estate."

"There are definitely aspects of this that can be discussed in open meeting," said Millican.

Michael said discussing the details in public session might negatively impact negotiations with Snowshoe.

Back in open session, however, Michael gave a brief overview of the changes to the transfer agreement, which will soon be filed with the PSC.

"Phase two was supposed to happen at final bond closing when we got all of our money." Michael told the board.

"What we're proposing now is different in terms of timing and in terms of payment and the treatment system."

"In terms of timing, we're proposing that we acquire the system now," Michael continued. "That includes the whole system—everything. We would become the sewer utility up there.

No money would change hands between the PSD and the resort, said Michael. Once the original treatment system is taken out of operation, the PSD would be responsible for cleaning it up.

"This has no rate impact, because the $431,000 we were paying them [was] already built into the rates," said Michael. "Since we're not paying them, that amount is built into the rates to fix the lagoon."

Smith said he saw the new transfer agreement as the next logical step in moving the project forward.

"In hindsight, this should have been done at the beginning, as far as the transfer of those customers is concerned," Millican added. "It's a topic I discussed a few months ago, and I think others agree that it would have been best to have those customers from the very beginning."

"Taking this action will not stop you from relocating the treatment plant site at all," Michael told the board. "In fact, at the present time, this looks like the only way we're going to get money to evaluate that site the rail authority owns."

Both the revised transfer agreement and the $2.5 million request to the IJDC will require approval of the PSC. "We are hoping that this won't be a contentious process," said Michael, "and if it's not, it should be a matter of several months. Otherwise, it's out of our control."

Read the related blog concerning this issue.