The Paducah Board of Commissioners introduced an ordinance to repeal the current Paducah Water rates and introduced an ordinance to set new rates. General Manager Bill Robertson and Office Manager Tillman Burnett made a presentation to the Board about Paducah Water’s structure, assets, and current financial challenges.
Paducah Water was started by investors in 1885 and purchased by the City in 1930. The Board of Commissioners of Waterworks governs Paducah Water; however, the lowering or raising of water rates must be ratified by the City Commission. Paducah Water has 51 employees with an annual budget of $11.5 million. The system has a 19.99 mgd water treatment plant, 631 miles of water mains, seven storage tanks, and five pump stations. More than 66,000 people are served by Paducah Water which has a service area including McCracken County and small portions of Graves County and Marshall County.
Robertson said that over several years the cost to comply with Federal water quality regulations, increased pension costs, increased electricity costs, and a general decline in water use per customer have reduced net operating revenue to a point that Paducah Water has insufficient revenue to properly operate and maintain its facilities. He added that the current rate structure does not provide adequate revenue to meet existing needs or provide funding to replace water meters or remove lead service lines within the distribution system.
Robertson proposes changing the rate structure saying that the current structure has smaller water users subsidizing the larger volume users. The proposed changes include removing the upper two rate blocks: users that consume 500,001 to 1 million gallons and users that consume more than 1,000,001 gallons per month. Those rate blocks would be replaced with one rate block with a charge of $2.02 per 1000 gallons for users who consume more than 500,001 gallons per month. Robertson also proposes reducing the monthly rate for the consumers who use 1500 gallons or less per month.
Another proposed rate change is the addition of a flat customer charge of $2 per month effective July 1. This flat fee would be in addition to the water consumption costs. The flat fee would increase to $3 per month per customer effective July 1, 2020, and then increase to $4 per month effective July 1, 2021.
Robertson also provided a comparison between the proposed rates and the monthly average of other water utilities in Kentucky. The estimated monthly water cost for a Paducah Water user that consumes 5000 gallons of water would be $27.51. The Kentucky average is $39.75 per month for a 5000 gallon per month user.
Robertson said that the proposed rate adjustment would allow Paducah Water to eliminate lead service lines in the distribution system, provide for 30-day meters reads for all consumers, and provide for the installation of an automated meter system that would allow customers to view and manage their water usage.
At the February 26 meeting of the Paducah Board of Commissioners, the Board approved an emergency ordinance for a contract with Danny Cope & Sons Excavating, LLC in the amount of $573,000 for the emergency demolition of the building at 318 Broadway also known as the Kresge Building. At this meeting, the Board approved an ordinance for Change Order No. 1 which adds $14,160 to the contract. The change order is due to the addition of support brackets on the wall that adjoins the Regions Bank building. Also at this meeting, the Board approved an emergency ordinance for an addendum to the agreement with Danny Cope & Sons. The emergency ordinance allows for partial payments to be provided to the contractor based on the percentage of the demolition project completed.
The City purchased the building in October 2018 for less than $400 as part of a foreclosure process with the intent to raze the deteriorated building and advocate for future redevelopment. The building had not been occupied for more than two decades. However, in mid-February, several bricks fell from the building’s façade accelerating the need to demolish the building since it was declared a public safety threat. The demolition process included stabilizing the building’s front and back walls. Then, the interior walls were detached from the adjacent buildings. Currently, the majority of the building has been razed with the contractor now focusing on removing the debris and grading the site.
The Paducah Board of Commissioners approved an ordinance for Contract Amendment #1 with Marcum Engineering, LLC for the City Hall Renovation Project. Marcum has provided the design and construction administration services on the project. The City approved a fee of $337,000 for the project which went into effect in April 2017. This amendment increases Marcum’s contract by $59,500 to a total contract amount of $396,500. The contract increases are due to a variety of factors including the addition of landscaping and lighting services, coordination with the Kentucky Heritage Council, time extensions due to construction, and additional services due to concrete podium changes and the abatement of materials.
The Paducah Board of Commissioners approved a joint resolution with the McCracken County Fiscal Court supporting Paducah’s application to the Tennessee RiverLine Pilot Community Program. The Tennessee RiverLine is a proposed system of multi-modal trails along the 652-mile Tennessee River system. Paducah would be the northern terminus of the trail system. River Discovery Center Executive Director Julie Harris said, “This is a fascinating project. It has the potential to reap lifetime benefits for Paducah.” As the partnership of organizations work to develop the Tennessee RiverLine program and determine how individual communities can get involved, the pilot program includes a community leader workshop, a community engagement event, and a research report. The partnership working on the program includes support of the National Park Service, the Nature Conservatory, Tennessee Valley Authority, University of Tennessee, Tennessee Department of Health, City of Knoxville, River Discovery Center, and the Tennessee Aquarium.