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Neighbors Growing Together | Apr 20, 2014

Mount Union still not paying; RUSS in bind

By TRISHA PHELPS | Sep 13, 2013

MOUNT PLEASANT (GTNS) – At Wednesday’s Regional Utility Service Systems meeting, executive director Bruce Hudson informed the board it was getting dangerously close to defaulting on its USDA loan.

Hudson opened the floor for an intense discussion between residents of Mount Union and the RUSS board concerning the possibility of raising their rates.

System users in Mount Union are paying $57.63 per month. When the system was first installed, the cost per month was a $43 base fee for 3,000 gallons of usage and then $8 per 1,000 gallons.

“The last two years of setting up my budget, [I have found] if everybody was paying I should have been able to reduce the rate, but obviously that is not the case,” said Hudson.

“Our current loss is $864.45 every month, so keeping that in mind as I have been preaching for several months if not a year or more, that eventually we are going to run into this,” Hudson said. “At some point, the RUSS board is going to have to make a decision, not a decision that they want to make, but by law we are obligated to, as required in the tax revenue bonds put together by the USDA.

Hudson said the board might default on the loan in a couple of months.

“My budget says that $69.88 is what the new rate is going to have to be moved to to meet the expenses and to meet the requirements of the debt to be paid off.”

If RUSS defaults on the loan, the debt would fall onto the shoulders of each of the 10 counties in the RUSS organization to pay.

Hudson then informed the board and the visitors the money received each month from paying customers goes into a separate account that has been established to pay for the operation and maintenance of the Mount Union system and to pay back the USDA loan that was used to build its system. RUSS is using an emergency reserve fund to pay the difference. The emergency fund, however, is quickly running out of money.

“None of this money that comes in from Mount Union goes into the RUSS general fund,” said Hudson. “I want to make that clear. This is not RUSS money; this is the system’s money that would go to operate the system. RUSS has got to look at this as we are running a business and we have got to meet the obligations we have entered into.”

Hudson then opened up the floor to the Mount Union residents who came to the meeting.

“I just don’t understand why we, as the people who are paying, should have to pay more because they [the city of Mount Union] aren’t doing anything to the people who aren’t paying,” said Mount Union resident Lelia Wilkerson. “I was thrilled when I came home at night and saw the flags in people’s yards that there was going to be a shut-off valve. If they don’t pay their electricity it would get shut off, so why should we have to pay more to keep them and their homes running efficiently?”

“I think it is more of a power struggle between our mayor and Bruce,” continued Wilkerson. “I think there has been a lot of things said and a lot of things done and I think an arbitrator would have helped way back then. It has been two years and they haven’t done anything to the people who aren’t paying and we have been paying, and now you are going to burden us more just because we are the good citizens who are paying our bills?”

Several of the board members agreed with Wilkerson’s point that it was unfair to raise the rates on people who are paying their bills, including Van Buren County supervisor Bob Waugh, who pointed out that the responsibility of making sure users pay rests with the city, not with RUSS.

“I agree whole-heartedly, you shouldn’t be paying for the ones that aren’t paying their bills,” said Waugh. “In that same token, though, in the agreement that Mount Union has with RUSS, it says that it is the city’s responsibility to collect from the people who aren’t paying. The city itself has to indemnify RUSS for those accounts that aren’t paying. And we do not control the city council.”

Jefferson County supervisor Lee Dimmitt also informed the visitors that there is a safety concern in regards to installing the shut-off valves in Mount Union.

“I was very vocal on the shut-off valves,” said Dimmitt. “If you don’t pay your electric bill, the electric company shuts it off. I don’t care if you flush your stool or not, but then the city filed a lawsuit and an injunction to prevent us from doing that which has not been ruled on. There have been threats issued if we go in and do it. County law enforcement will not back our people up. If law enforcement won’t back our people up, then I don’t want to send people in that could get hurt.”

Hudson informed everyone that there was another hearing on the legal issues on Monday and depending on the ruling from that the rates may not need to go up.

The board passed a motion to raise the rates on Nov. 1, with a 30-day notice to customers, which may be rescinded at their next meeting, based on the outcome of Monday’s hearing.

 

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