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Aldermen Approve Small Increase For Water Rates

Officials at Water Valley Poultry, LLC, asked the city to hold off on increasing the water rate for industrial customers while the company makes improvements.

By David Howell

Editor


WATER VALLEY – Aldermen approved a small rate increase for water and sewage for residential customers in last week’s city board meeting but stopped short of implementing an increase for industrial customers.

The residential increase will increase the monthly bill 15 cents per thousand gallons for usage over 2,000 gallons and 24 cents for sewer. The increases will continue each year for the next three years. 

Water and Sewer Department Manager David Floyd explained in the Feb. 6 city board meeting that the proposed industrial water rate increase would be nominal for all customers except Water Valley Poultry, the city’s largest water customer. The proposed increase would up the poultry plant’s bill from around $9,000 per month to $12,500, an almost 40 percent increase for the estimated 12 millions of gallons used each month. 

Both Floyd and Water Valley Mayor Donald Gray recommended postponing the industrial rate increase, citing a meeting earlier in the day with officials at the poultry plant. 

“We had a meeting today with the plant, they are doing a lot to upgrade their plant up there and spending a lot of money to do all of this. We found that a great increase on the poultry plant would probably need to be postponed right now,” Floyd recommended.

Floyd said a smaller increase may be feasible, but they would need to meet again with the poultry plant officials to determine how much.

Gray added that the plant’s new manager also attended the meeting with city officials earlier in the day.

“The figure that they threw out that they were to spend to upgrade to try to help us on our problem is up to a million dollars,” Gray explained, adding that the water rate increase could jeopardize the investment and the future of the plant. 

Both Floyd and Gray explained that the investment to upgrade the plant’s wastewater treatment is an attempt to resolve lingering issues that both the city and plant face with the Mississippi Department of Environmental Quality with wastewater treatment. 

Last February MDEQ officials confirmed to the Herald that wastewater samples taken from the poultry plant were problematic.  MDEQ Enforcement/Compliance Division Chief Chris Sanders also explained that his agency was working with the city and poultry plant on the issue.


Feedback From Aldermen

Even with the increase, Ward 2 Alderman Coughlin said the poultry plant would still pay far less for water than what neighboring communities charge. Coughlin said in Grenada, Batesville or Oxford they would pay around $60,000 per month for the same water usage.

“So they are talking about a million dollar investment, but $3,500 a month would ruin their business?” Coughlin asked, again comparing the lower rate the plant pays to what they would pay if they relocated to another town.

“They are not going to relocate anywhere else in the state, I don’t think they would,” Gray said. “They have 165 employees right now.”

“So we are going to give them time to make these upgrades and then it will be revisited?” Ward 4 Alderman Nicole Folson asked.

“Yes, if they do it in a timely manner, now if they don’t do it in a timely manner we are going to have to address it, period,” Gray answered.

“I like the fact that they are talking about investing in their failing infrastructure, but what other industry would be given such a discount and subsidization from the community to operate?” Coughlin asked.

“We are not actually subsidizing right now, because the cost of chemicals is also for our part our cell, not just their cell,” Gray said about the cost the plant incurs for wastewater treatment at the city’s sewage treatment plant. 

Gray also said the plant manager promised to address problems and issues on a daily basis.

“Does our current rate allow for any actual infrastructure costs or are we just paying our day-to-day bills?” Coughlin asked about revenue generated from water in the city.

City Clerk Vivian Snider said the city transfers $1,500 a month into the construction fund.

“How much does a new well cost?” Coughlin said, “I think the ball park is a million dollars. My concern is that we can pay our bills, day-to-day, but our water treatment function is a big complicated function with some expensive parts. Those parts wear out over time, so having enough to pay our day-to-day bills based on our current rates, does not say that in 30 years, which is the average life span of a well, when we start having to replace things we are not charging enough to pay for our whole system,” Coughlin said.

“We have been surviving on grants, as we know, a lot of small communities do,” Gray noted.

“The idea that $3,500 a month would close a plant that has a million dollars to invest in infrastructure seems like a negotiation tactic that we should push through,” Coughlin said.

“I just don’t seeing us raising right now, until we give them time to come back. I am not against raising them, I am against raising them this amount at one time,” Gray said.

“We are trying to work together right now to resolve our DEQ issues,” Floyd reiterated.

“We have been doing that for a while,” Coughlin noted.

“Yes, we have been doing that for a while,” Floyd agreed.

“We are not talking about a five-year plan to bring them up to market rates, we are talking about bringing them up to 20 percent of market rates,” Coughlin said, again referring to his comparison of rates from neighboring town. 

“I never have liked us comparing ourselves to other cities,” Gray said.

“Things cost what they cost, these rates don’t go lower when you go to other parts of Mississippi, they go higher,” Coughlin continued.

“In our water training… every other community had it set up where your (water) rate increased in increments over time everywhere,” Ward 3 Alderman Cinnamon                                                                                                                                                              Foster explained.

After discussion, aldermen approved Floyd’s recommendation for an increase in residential rates.  They also agreed to revisit the industrial rate increase in a March meeting.  

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