Town of Oce P.O. Box 190 Oceana, West Virginia

Transcription

1 bla A. Rose, Mayor Sharlene J. Cook, Recorder/Treasurer Lela Walker, Attorney Town of Oce P.O. Box 190 Oceana, West Virginia (304) Members of the Council (304-) \)/ Jack Elkins Clark Manning Johnny Aliff John Roach Jim Pennington March 18,2005 Sandra Squire, Executive Secretary Public Service Commission of West Virginia Post Office Box 8 12 Charleston, WV F Dear Ms. Squire:,Jr As city attorney for the Town of Oceana, I am sending to you for filing the enclosed documents for a recently enacted municipal sewer system rate increase. a -4 Please file the following documentation: (1) A copy of the new rates and charges. (2) A copy of the ordinance. (3) The financial justification for the increase, including the pro forma income and expense statement. (4) An affidavit of publication indicating that preadoption notice of the ordinance was given. (5) The correct number of customers determined by the last billing cycle before the adoption of the ordinance. (6) A letter indicating that a press release and a Class IT legal advertisement was requested and published within the five day post-adoption period, with an Affidavit of Publication to be filed immediately upon receipt from the newspaper. An Affidavit of Posting will be sent at the expiration of the posting period. Thank you for your cooperation in this matter. If you have any questions, please contact me at (304) or P.O. Box 909 Oceana, WV Very truly yours, Leia Walker Attorney for the Town of Oceana

2 A Copy of the New Rates and Charges I A Copy of the Ordinance 2 The Financial Justification For the Increase, Including the Pro Forma Income3 and Expense Statement An Affidavit of Publication Indicating that Preadoption Notice of the Ordinance 4 was Given The Correct Number of Customers Determine by the Last Billing Cycle Before Adoption of the Ordinance A Letter Indicating that a Press Release A and a Class I1 Legal Advertisement was 0 Reauested and Published Within the Five Day Pot&-Adoption Period, With an Affidavit of- Publication to be Piled Immediately Upon Receipt from the Newspaper Onestep" INDEXSYSTEM

3 ~ Oceana.,I? I Tariff Form No. 12 (Tariff Rule 44) PUBLIC SOTICE Of CHANGE IN R4TES BY ML'NICIPALITIES NOTICE is hereby given that Town Of oceans SJiWEX PHASE I public utility, has adopted by ordinance on March " a tariff containing d rates, tolls and charges for furnishing SeWe 1,634 Customers at n t e Co i oc%!5s--5!@ Virginia lomyitieq of ~~--~~ West The proposed increased rates and charges will become effective my I 2005 unless otherwise ordered by the Public Service Commission and will produce approximately% I y4 I 54 annually in additional revenue, an increase of 25.5 %. The average monthly bill for the various classes of customers will be changed as follows: ($) INCREASE INCREASE (%) Residential ( 3 I 800 gallons $ % Commercial ( 1 0 r 500 gallons 1 $ % Industrial $ N/A N/A % Resale 3 N%A N/A?4 Other $ N/A N/A % -AI_- Resale customers of N/A -- L The increases shown are based on averages of all customers in the indicated class. Individual customers may receive increases that are greater or less than average. Furthermore, the requested rates and charges are only a proposal and are subject to change (increases or decreases) by the Public Service Commission in its review of this filing. The Commission shall review and approve or modify the increased rates only upon the filing of a petition within thirty (30) days of the adoption of the ordinance changing said rates or charges, by: 1 (1) Any customer aggrieved by the changed rates or charges who presents to the Commissiona petition signed by not less than twenty-five percent of the Customers served by such municipally operated public utility; or (2) Any customer who is served by a municipally operated public utility and who resides outside the corporate limits and who is affected by the change in said rates or charges and who presents to the Commission a petition alleging discrimination between customers within and without the municipal boundaries. Said petition shall be accompanied by evidence of discrimination; or (3) Any customer or group of customers who are affected by said change in rates who reside within the municipal boundaries and who present a petition to the Commission alleging discrimination between said customer or group of customers and other customers of the municipal utility. Said petition shall be accompanied by evidence of discrimination. All petitions should be addressed to the Executive Secretary, Public Service Commission of West Virginia. 201 Brooks Street, P. 0. Box 812, Charleston, West Virginia A complete copy of the proposed rates, as well as a representative of the utility to provide any information requested concerning it, is available to all customers, prospective customers, or their agents at any Of the following offices of the utility. City Hall A copy ofthe proposed rates is available for public inspection at the office of the Executive Secretary of the Public Service Commission at 201 Brooks Street, P. 0. Box 812. Charleston, West Virginia t

4 Tariff Form No. 12 (Tariff Rule 44) NOTICE is hereby given that the KW'i'l Of OCeana public utility, has adopted by ordinance on March 17, 2005 a tariff containing increased rates, tolls and charges for furnishing sewer.i ' service to 1,634 (number of customers) customers at oceanaanuother -_ in the ounty of WYming ds~maing unincorporata localities The proposed increased rates and charges will become effective "-'*&ne 2o06 unless otherwise orderedby the Public ServiceCommission and will produceapproximately S mo7-atlnua1ly in additional revenue, an increase of 2.3 %, The average monthly bill for the-various classes of customers will be changed as follows: ($) MCREASE MCREASE (%) Residential ( 3,800 gallons $ % Comercia1 ( 10,500 -gallons) $ % Industrial $ In N/A % Resale $ -%A --pj/ta?4 Other $ N/A a#/?* % Resale customers of N/A & The increases shown are based on averages of all customers in the indicated class. Individual customers may receive increases that are greater or less than average. Furthermore, the requested rates and charges are only a proposal and are subject to change (increases or decreases) by the Public Service Commission in its review of this fiiing. The Commission shall review and approve or modify the increased rates only upon the filing of a petition within thirty (30) days of the adoption of the ordinance changing said rates or charges, by: 1 (1) Any customer aggrieved by the changed rates or charges who presents to the Commissiona petition signed by not less than twenty-five percent of the customers served by such municipally operated public utility; or (2) Any customer who is served by a municipally operated public utility and who resides outside the corporate limits and who is affected by the change in said rates or charges and who presents to the Commission a petition alleging discrimination between customers within and without the municipal boundaries. Said petition shall be accompanied by evidence of discrimination; or (3) Any customer or group of customers who are affected by said change in rates who reside within the municipal boundaries and who present apetition to the Commission alleging discrimination between said customer or group of customers and other customers of the municipal utility. Said petition shall be accompanied by evidence of discrimination. All petitions should be addressed to the Executivs Secretary, Public Service Commission of West Virginia. 201 Brooks Street, P. 0. Box 812, Charleston, West Virginia A complete copy of the proposed rates, as well as a representative of the utility to provide any information requested concerning it, is available to all customers, prospective customers, or their agents at any of the foilowing offices of the utility. OC&ma City Hall A copy of the proposed rates is available for public inspection at the office of the Executive Secretary of the Public Service Commission at 201 Brooks Street, P. 0. Box 812. Charleston, West Virginia

5 PRE-ADOPTION NEWSPAPER NOTICE NOTICE TOWN OF OCEANA Notice is hereby given that the Town of Oceana, a municipal corporation, will hold a hearing before the final vote on a proposed ordinance, the principal object of which is the increase of sewer rates for customers of the sewer system operated by the Town of Oceana. The title of such ordinance is An Ordinance Establishing And Fixing Rates, Delayed Payment Penalties, Connection Charges, Reconnection Charges And Other Charges For Service To Customers Of The Sewerage System Of The Town Of Oceana. The final vote on adoption of said proposed ordinance shall be held in the Council Chambers of the Town of Oceana, City Hall, Oceana, West Virginia on March 1 7th, 2005, at seven o clock (7:OO) p.m. Interested parties may appear and be heard at such time with respect to the passage of the proposed ordinance. Copies of the proposed ordinance are available at the Office of the Town Recorder, City Hall, in Oceana. The proposed ordinance is as follows: TOWN OF OCEANA AN ORDINANCE ESTABLISHING AND FIXING RATES, DELAYED PAYMENT PENALTIES, CONNECTION CHARGES, RECONNECTION CHARGES AND OTHER CHARGES FOR SERVICE TO CUSTOMERS OF THE SEWERAGE SYSTEM OF THE TOWN OF OCEANA. THE CITY COUNCIL OF THE TOWN OF OCEANA HEREBY ORDAINS: The following schedule of rates, delayed payment penalties, connection charges, reconnection charges and other charges are hereby fixed and determined as the rates, delayed payment penalties, connection charges, reconnection charges and other charges to be charged to customers of the sewerage system of the Town of Oceana throughout the territory served. SCHEDULE I. SCHEDULE OF SEWER RATES PHASE ONE APPLICABILITY Applicable in entire territory served. (C) (C,I) AVAILABILITY OF SERVICE Available for domestic, commercial, industrial (except unusual industrial waste) and resale (non contract)sewer service. RATES (Based won metered volume of water supplied) $9.90 Per I, 000 gallons per month

6 MINIMUM BILL Each customer shall pay a minimum charge of $24.75 per month based on 2,500 gallons per month UNMETERED RATE A flat fee of $44.55, based on 4,500 gallons of water usage per month, will be charged for all unmetered customers. SERVICE CONNECTION CHARGE $ Debt Service Reserve Recovery Surcharge A surcharge of $5.00 per customer per month shall be imposed on all classes of service for recovery of Debt Service Deficiencies. This Surcharge shall remain in effect until further action of the Town of Oceana. DELAYED PAYMENT PENALTY The above tariff is net. On all current usage billings not paid within twenty (20) days, ten percent (10%) will be added to the net current amount unpaid, This delayed payment penalty is not interest and is to be collected only once for each bill where it is appropriate. WATER DISCONNECT-RECONNECT-ADMINISTRATIVE FEES Whenever water service has been disconnected for non-payment of sewer bills, a disconnection fee of $25.00 shall be charged; or in the event the delinquent sewer bill is collected in the field, and administrative fee of $25.00 shall be charged. A $25.00 reconnection fee will be assessed for each occurrence where water service to sewer customers is restored, after water service has been terminated for non-payment of sewer bills. RETURNED CHECK CHARGE If a check received is returned by the bank for any reason, the City s charge to the customer for such returned check shall be $ LEAK ADJUSTMENT INCREMENT $5.00 per 1,000 gallons is to be used when the bill reflects unusual consumption which can be attributed to eligible leakage on the customer s side of the meter. Indicated increase (C) Indicates change in wording

7 ~ J 3 SCHEDULE I1 SURCHARGE FORMULA TO BE APPLIED IN CASES WHERE SU RFACE DRAINAGE IS CONNECTED TO THE CITY S SANITARY SEWER SYS TEM Where the City has discovered that a customer s roof drain, down spouts, storm sewer or other similar facilities conducting surface water have been connected to the City s sewer system, and such customer has failed to take appropriate action, within thirty (30) days of receipt of a demand by the City in accordance with the Rules and Regulations of the Public Service Commission, to eliminate such connection, a surcharge will be imposed upon the customer calculated on the basis of the following formula: - S - The surcharge in dollars. S = A X R X, X C A - The area under roof and/or the area of any other water collection surface connected to the sanitary system, in square feet. R - The measured monthly rainfall, in inches. d 1, A conversion factor to charge inches of rain x square feet of a surface to thousands of gallons of water. C - The City s approved rate per thousand gallons of metered water usage. The City shall not impose the surcharge unless and until the customer has been notified by certified mail, return receipt requested, or by hand delivery, that it has been established by smoke testing, or on-site inspection that rain or other surface water is being introduced into the sanitary system at the customer s location, and that the customer has not acted within thirty (30) days from the receipt of such notice to divert the water from the sanitary sewer system. Said surcharge shall be calculated and imposed for each month that said connection continues to exist. Failure to pay the surcharge and/or correct the situation shall give rise to possible termination of water service in accordance with the Rules and Regulations of the Public Service Commission of West Virginia. SCHEDULE I11 SURCHARGE FORMULA TO BE APPLIED IN THE CASE OF USERS PRODUCING UNUSUAL WASTE The charge for the treatment of unusual waste will be calculated on the basis of the following

8 formula: Ci = charge to unusual users per year Ci = VoVi + BoBi + SoSi Vo = average unit cost of transport and treatment chargeable to volume, in dollars per gallon Vi = volume of waste water from unusual users, in gallons per year Bo = average unit cost of treatment, chargeable to Biochemical Oxygen Demand (BOD) in dollars per year Bi = weight of BOD from unusual users, in pounds per year So = average unit costs of treatment (including sludge treatment chargeable to total solids, in dollars per pound) Si = weight of total solids from unusual users, in pounds per year When an unusual user is to b served, a preliminary study of its wastes, and the cost of transport and treatment thereof, will be made. Waste containing material which, in the judgement of the Oceana Sanitary Board, should not be introduced into the sewer system need not be handled by it. The results of this preliminary study will be used to determine the feasibility of the proposed sewer service and the charge thereof, based upon the formula set out above. Thereafter, unusual sewage will be monitored on a regular basis and at the conclusion of each fiscal year, based on the investigation aforesaid and audit of the Oceana Sanitary Board records, new cost figures will be calculated for use in the above formula. The cost of establishing the monitoring facilities shall be paid by the unusual user. Based on these audited figures, additional billings covering the past fiscal year will be made for payment by each unusual user, or rehnd given by the Oceana Sanitary Board, as the case may be. Such audited figures will then be used for the preliminary billing for the next fiscal year, at the end of which an adjustment will be made as aforesaid. SCHEDULE IV APPLICABLE INSIDE AND OUTSIDE OF THE CORPORATE LIMITS OF THE TOWN OF OCEANA Where the amount of sanitary sewage discharged into the Oceana wastewater collection andor transmission andor treatment system by certain industrial plant or plants cannot be accurately

9 3 determined by the use of the plant s water meter or meters, and said plant cannot install a flow meter to measure such waste, a special formula will be used whereby such plant or plants will pay to the Oceana Sanitary Board a sewer charge calculated at fifty (50) gallons of water per each employee at the plant each working day. This explanation is not part of the rate schedule: This schedule is included on an if-and-when basis. SCHEDULE V APPLICABILITY Applicable in entire territory served. AVAILABILITY OF SERVICE Available for wastewater and leachate haulers RATES 1) Commoditv Charge - Each hauler shall pay a commodity charge of $25.00 per 1,000 gallons per load. Load will be two times the actual capacity of the truck or other transport method delivering wastewater and leachate. Actual capacity shall be determined or verified by the City. DELAYED PAYMENT PENALTY The above tariff is net. On all current usage billings not paid within twenty (20) days, ten percent (10%) will be added to the net current amount unpaid. This delayed payment penalty is not interest and is to be collected only once for each bill where it is appropriate. RETURNEDCHECKCHARGE If a check received is returned by the bank for any reason, the bank s charge to the City shall be the City s charge to the customer for such returned check and under no circumstances shall the fee collected by the City exceed $ (I) Indicated increase (C) Indicates change in wording (N) Indicates new

10 SCHEDULE VI. SCHEDULE OF SEWER RATES PHASE TWO APPLICABILITY Applicable in entire territory served. AVAILABILITY OF SERVICE Available for domestic, commercial, industrial (except unusual industrial waste) and resale (non contract)sewer service. RATES (Based upon metered volume of water supplied) $10.00 Per 1,000 gallons per month MINIMUM BILL Each customer shall pay a minimum charge of $30.00 per month based on 3,000 gallons per month UNMETERED RATE A flat fee of $45.00, based on 4,500 gallons of water usage per month, will be charged for all unmetered water customers. SERVICE CONNECTION CHARGE $ Debt Service Reserve Recovery Surcharge A surcharge of $5.00 per customer per month shall be imposed on all classes of service for recovery of Debt Service Deficiencies. This Surcharge shall remain in effect until hrther action of the Town of Oceana. DELAYED PAYMENT PENALTY The above tariff is net. On all current usage billings not paid within twenty (20) days, ten percent (10%) will be added to the net current amount unpaid. This delayed payment penalty is not interest and is to be collected only once for each bill where it is appropriate. WATER DISCONNECT-RECONNECT-ADMINISTRATIVE FEES Whenever water service has been disconnected for non-payment of sewer bills, a disconnection fee of $25.00 shall be charged; or in the event the delinquent sewer bill is collected in the field, and administrative fee of $25.00 shall be charged. A $25.00 reconnection fee will be assessed for each occurrence where water service to sewer customers is restored, after water service has been terminated for non-payment of sewer bills.

11 RETURNED CHECK CHARGE If a check received is returned by the bank for any reason, the City s charge to the customer for such returned check shall be $ LEAK ADJUSTMENT INCREMENT $5.00 per I, 000 gallons is to be used when the bill reflects unusual consumption which can be attributed to eligible leakage on the customer s side of the meter. Indicated increase (C) Indicates change in wording SCHEDULE VI1 SURCHARGE FORMU LA TO BE APPLIED IN CASES WHERE SURFACE DRAINAGE IS 3 Where the City has discovered that a customer s roof drain, down spouts, storm sewer or other similar facilities conducting surface water have been connected to the City s sewer system, and such customer has failed to take appropriate action, within thirty (30) days of receipt of a demand by the City in accordance with the Rules and Regulations of the Public Service Commission, to eliminate such connection, a surcharge will be imposed upon the customer calculated on the basis of the following formula: S = A X R X, X C S - The surcharge dollars. A - The area under roof and/or the area of any other water collection surface connected to the sanitary system, in square feet. R - The measured monthly rainfall, in inches A conversion factor to charge inches of rain x square feet of a surface to thousands of gallons of water. C - The City s approved rate per thousand gallons of metered water usage. J The City shall not impose the surcharge unless and until the customer has been notified by certified mail, return receipt requested, or by hand delivery, that it has been established by smoke testing, or on-site inspection that rain or other surface water is being introduced into the sanitary system at the customer s location and that the customer has not acted within thirty (30) days from the receipt of such notice to divert the water from the sanitary sewer system. Said surcharge shall be calculated and imposed for each month that said connection continues to

12 exist. Failure to pay the surcharge and/or correct the situation shall give rise to possible termination of water service in accordance with the Rules and Regulations of the Public Service Commission of West Virginia. SCHEDULE VI11 SURCHARGE FORMULA TO BE APPLIED IN THE CASE OF USERS PRODUCING UNUSUAL WASTE The charge for the treatment of unusual waste will be calculated on the basis of the following formula: Ci = charge to unusual users per year Ci = VoVi t BoBi t SoSi Vo = average unit cost of transport and treatment chargeable to volume, in dollars per gallon Vi = volume of waste water from unusual users, in gallons per year Bo = average unit cost of treatment, chargeable to Biochemical Oxygen Demand (BOD) in dollars per year Bi = weight of BOD from unusual users, in pounds per year So = average unit costs of treatment (including sludge treatment chargeable to total solids, in dollars per pound) Si = weight of total solids from unusual users, in pounds per year When an unusual user is to b served, a preliminary study of its wastes, and the cost of transport and treatment thereof, will be made. Waste containing material which, in the judgement of the Oceana Sanitary Board, should not be introduced into the sewer system need not be handled by it. The results of this preliminary study will be used to determine the feasibility of the proposed sewer service and the charge thereof, based upon the formula set out above. Thereafter, unusual sewage will be monitored on a regular basis and at the conclusion of each fiscal year, based on the investigation aforesaid and audit of the Oceana Sanitary Board records, new cost figures will be calculated for use in the above formula. The cost of establishing the monitoring facilities shall be paid by the unusual user. Based on these audited figures, additional billings covering the past fiscal year will be made for payment by each unusual user, or rehnd given by the Oceana Sanitary Board, as the case may be. Such audited figures will then be used for the preliminary billing for the next fiscal year, at the end of which an adjustment will be made

13 3 as aforesaid. SCHEDULE IX APPLICABLE INSIDE AND OUTSIDE OF THE CORPORATE LIMITS OF THE TOWN OF OCEANA :> Where the amount of sanitary sewage discharged into the Oceana wastewater collection and/or transmission andor treatment system by certain industrial plant or plants cannot be accurately determined by the use of the plant s water meter or meters, and said plant cannot install a flow meter to measure such waste, a special formula will be used whereby such plant or plants will pay to the Oceana Sanitary Board a sewer charge calculated at fifty (50) gallons of water per each employee at the plant each working day. This explanation is not part of the rate schedule: This schedule is included on an if-and-when basis. 3 > (N) (N) (N) (N) SCHEDULE X APPLICABILITY Applicable in entire territory served. AVAILABILITY OF SERVICE Available for wastewater and leachate haulers RATES Commodity Charge - Each hauler shall pay a commodity charge of $25.00 per 1,000 gallons per load. Load will be times the actual capacity of the truck or other transport method delivering wastewater and leachate. Actual capacity shall be determined or verified by the City. DELAYED PAYMENT PENALTY The above tariff is net. On all current usage billings not paid within twenty (20) days, ten percent (10%) will be added to the net current amount unpaid. This delayed payment penalty is not interest and is to be collected only once for each bill where it is appropriate. RETURNED CHECK CHARGE If a check received is returned by the bank for any reason, the bank s charge to the City shall be the City s charge to the customer for such returned

14 check and under no circumstances shall the fee collected by the City exceed $ I) Indicated increase (C) Indicates change in wording (N) Indicates new SECTION XI. EFFECTIVE DATE The rates, delayed payment penalties, connection charges, reconnection charges and other charges provided herein shall not be effective any sooner than forty five days after final passage or adoption. fi The provisions of this Ordinance are separable, and if any clause, provision or section hereof be held void or unenforceable by any court of competent jurisdiction, such holding shall not affect the remainder of this Ordinance. All ordinances, resolutions, orders or parts thereof in conflict with the provisions of this Ordinance are, to the extent of such conflicts, hereby repealed; and to the extent that the provisions of this Ordinance do not touch upon the provisions or prior ordinances, resolutions, orders, or parts thereof, the same shall remain in fbll force and effect. SECTION XIII. STATUTORY NOTICE AND PUBLIC HEARING Upon introduction hereof, the Town Recorder shall publish a pre-adoption legal advertisement regarding this Ordinance, as a Class I1 legal advertisement, at least ten days before the final reading, in the IndeDendent Herald, a qualified newspaper published and of general circulation in the Town of Oceana, and said notice shall state that this Ordinance has been introduced, and that any person interested may appear before Council at the City Hall, Oceana, West Virginia, on the 17'h day of March, 2005, at 7:OO p.m., and present protests. At such hearing all objections and suggestions shall be heard and the Council shall take such action as it shall deem proper in the premises. PASSED AND APPROVED at a first reading of said ordinance on the lorh day of February, 2005, and at second reading of said ordinance on the 17'h day of March, P n n dharlene J. Codk. Record1 er U' -~. Nola A. Rose,hayor

15 December 20,2004 VIA Electronic Mail and US Mail Mark E. Kauffelt, Attorney for West Virginia Water Development Authority Law Ofices of Kauffelt & Kauffelt Post OEce Box Capitol Street, Suite 803 (25301) Charleston, West Virginia RE: Town Of Oceana Water and Sewer Issues 2005 Debt Deficiency Proposed Plan of Corrective Action Mr. Kauffelt: Ow firm is currently under contract with the Town of Oceana providing services related to water and sewer financial matters. The Town has received your letter dated November 1, 2004 expressing concern about the deficiencies that exist in the Town s water and sewer debt service accounts. In your letter, you opined that Dramatic steps need to be taken... 9 to reduce the size of these deficiencies. The WDA requested that the Town develop a plan to eliminate the deficiencies. This plan was requested to be filed by November 30,2004. Our firm was engaged to prepare a response to the request. We requested additional time from Mr. Yonkosky and advised that the Town intended on taking dramatic steps to deal with matter. With this filing, the Town proposes a plan for this unfortunate situation. First, I will provide some background on what has occurred with the Town of Oceana. In the late 1990 s the Town undertook a large wastewater plant and collection system project. Through the knding and approval process, the Town enacted increased water and sewer rates and obtained financing. The financing was low and no interest loans and grant funds. The Town employed an accountant and passed recommended rates. The increased revenues based on the enacted tariff never met expectations. Our firm became involved in The Town experienced disastrous flooding on two occasions, displacing businesses and homes. The Town has also endured significant declines in average consumption. Expenses have increased beyond that anticipated during the project. Litigation related to 2003 rate increases led to increased expenses, delays and ultimately less revenue. All of these factors have put the Town in the situation it faces today. The current administration and Council, as well as the prior, really have had little ability to take action to alter these events. The financial wherewithal of the citizens of Oceana is also a concern as it relates to increases in rates and charges.

16 Mark E. Kauffelt, Attorney for WV WDA December 20,2004 Page 2 of 2 Given the difficult situation, I have prepared information for increased rates and charges for both the water and sewer utilities. I have also included proposed surcharges to be dedicated to debt service deficiencies recovery. I have prepared the necessary information for the Town Council to begin the process to enact these dramatic changes. Enclosed as part of this Plan are the following: 1. Letter requesting funding agencies debt forgiveness/restructuring. 2. Oceana Water Proforma Rate Exhibit with Cash Flow Projections? 3. Oceana Sewer Proforma Rate Exhibit with Cash Flow Projections 4. Proposed Water and Sewer Tariffs for immediate implementation 5. Proposed Water and Sewer Budgets for FYE 2006, based on plan 6. Proposed Water and Sewer Tariffs for 2006 implementation Please review this plan and provide comments/response as soon as possible. It is the intention to begin the ordinance process is January, The Mayor and several members of Council have indicated a willingness to discuss these matters with the lenders at mutually accepted dates. If I can be of any assistance throughout this process, please let me know. Sincerely, CC: Michael D. Griffith, CPA Griffith & Associates Honorable Nola Rose, Mayor Ms. Sharlene Cook, Oceana Recorder Members of Council of the Town of Oceana Mr. Daniel B. Yonkosky, WV WDA Ms. Katy Mallory, PE, WVIJDC Ms. Rose Broderson, WV DEP Samme Gee, Jackson Kelly John C. Stump, Steptoe & Johnson, PLLC

17 c 8 Gri.tith & Associates Certijied spublic Accountants & ConsuCtants December 20,2004 VIA Electronic Mail and US Mail Mr. Daniel B. Yonkosky, West Virginia Water Development Authority 180 Association Drive Charleston, West Virginia RE: Town Of Oceana Water and Sewer Issues Request for Debt Forgiveness/Restructuring Mr. Yonkosky: Our firm is currently under contract with the Town of Oceana providing services related to water and sewer financial matters. The Town is facing extreme difficulties in it water and sewer operations. As you are aware the Town is deficient in meeting its bond obligations, both in technical and monetary default. The WDA administers loans for WVIJDC, WV DEP as well as WDA issues. As such this request is made of WDA for all current lenders involved with Oceana. Background on what has occurred with the Town of Oceana. In the late 1990 s the Town undertook a large wastewater plant and collection system project. Through the funding and approval process, the Town enacted increased water and sewer rates and obtained financing. The financing was low and no interest loans and grant funds. The Town employed an accountant and passed recommended rates. The increased revenues based on the enacted tariff never met expectations. Our firm became involved in The Town experienced disastrous flooding on two occasions, displacing businesses and homes. The Town has also endured significant declines in average consumption. Expenses have increased beyond that anticipated during the project. Litigation related to 2003 rate increases led to increased expenses, delays and ultimately less revenue. All of these factors have put the Town in the situation it faces today. The current administration and Council, as well as the prior, really have had little ability to take action to alter these events. The financial wherewithal of the citizens of Oceana is also a concern as it relates to increases in rates and charges. Accordingly, the Town of Oceana request that the funding agencies consider forgiveness / restructuring of it s long term debt obligations. We have not prepared a specific amount of forgiveness, rather asking for relief, with the intent of discussionhegotiation of the issues involving bond counsel for the Town and of the

18 -> Mr. Daniel B. Yonkosky, WDA December 20,2004 Page 2 of 2 lenders. Thank you in advance of this request and please advise of any information that you may need related to this request. Respectfully, u g q Michael D. Griffith, CPA Griffith & Associates CC: Honorable Nola Rose, Mayor Ms. Sharlene Cook, Oceana Recorder Members of Council of the Town of Oceana Mr. Daniel B. Yonkosky, WV WDA Ms. Katy Mallory, PE, WVIJDC Ms. Rose Broderson, WV DEP Same Gee, Jackson Kelly John C. Stump, Steptoe & Johnson, PLLC

19 TOWN OF OCEANA SANITARY SEWER PRO FORMA RATE EXHIBIT (12/20/04) 1 BASED ON THE FISCAL YEAR ENDED JUNE 30, DECEMBER 20, PREPARED BY: Michael D. Griffith, CPA 950 Little Coal River Road Alum Creek, West Virginia (304) Office (304) Fax

20 TbdN OF OCEANA SA 4 TARY SEWER irr/ CASH FLOW ANALYSIS FOR PROFORMA RATES ( ) BASED ON THE FISCAL YEAR ENDED JUNE 30,2004 Per Books Cash Available: June 30,2004 Operating Revenues Wastewater Revenues $ 761,761 Other Operating Revenues 4,304 Other Income Interest and Investment 1,378 Going Level 2005 $ 761,761 1,304 1,000 OCEANA Rates Pro Forma w/12,9% Increase 6 955,308 w/36 surcharge 1,304. 2,000 OCEANA Rates Pro Forma % Increase $ 976,809 $5 surcharge 1,304 3,000 TOTAL CASH AVAILABLE 764, , , ,113 Cash Requirements: Operation & Maintenance Expenses 281,188 Taxes Other Than Income Taxes 12,064 Administrative Fees on Debt CASH REQUIREMENTS 306, ,436 12,547 xu22 318, ,746 12, , ,240 13,182 xu22 333,944 CASH AVAILABLE FOR DEBT SERVICE (A) 457, , ,169 Debt Service Requirements: Principal Payments - Current LTD 378,734 Interest Expense Current LTD 68, ,177 67, ' ,827 66, ,851 65, ,82 7 Other Debt PI1 20, DSR 95,280 DSR DEBT SERVICE SUBTOTAL 467, , , ,107 Debt Service Reserve (10% P & I) 46,766 DepreclatlonlR & R Reserve (2.5% Revenues) 19,044 44,783 19,044 44,783 23,883 44,783 24,420 DEBT SERVICE REQUIREMENT 533, , % 612,310 CASH AVAILABLE FOR CAPITAL ITEMS (75,796) (66,093) 20, ,859 CAPITAL ADDITIONS 12,000 18,000 18,000 30,000 NET SURPLUS (DEFICIT) CASH FLOW (87,796) (84,093) 2, MAXIMUM ANNUAL DEBT SERVICE (B) DEBT SERVICE COVERAGE ( A I B ) 448, % 448, % 448, % 448, % UNAUDITED 540,000 Est. Def. 4/ Est. Years to Cure

21 TOWN OF OCEANA SANITARY BOARD ANNUAL OPERATING BUDGET FISCAL YEAR ENDING JUNE 30,2006 JANUARY 15,2004 'REPARED BY: 8 + g k Michael D. Griffith, CPA 950 Little Coal River Road Alum Creek, West Virginia (304) Office (304) Fax

22 TOWN OF OCEANA SANITARY BOARD ANNUAL OPERATING BUDGET - SEWER FISCAL YEAR ENDING JUNE 30,2006 Account No. pescription Annual Amount Operating Revenues 601.O Domestic Service Industrial Waste Service Service to Public Authorities Service to Other Systems $ 930, Forfeited Discounts 19, Misc.Sewerage Revenue 1,000 TOTAL OPERATIMG REVENUES Operation and Maintenance Expenses 9SO.OQQ 701.O O Collecting Expenses Operation Supervision and Engineering Operation Labor Supplies and Expenses Maintenance Supervision and Engineering Maintenance of Collecting System Maintenance of Service Connections and Traps Maintenance of Collecting and Transmission Mains Maintenance of Structures and Improvements Maintenance of Other Collecting System Equipment Total Collecting Expenses Pumping Expenses Operation Supervision and Engineering Operation Labor - Pumping Power and Fuel Supplies and Expenses Maintenance Supervision and Engineering Maintenance of Structures and Improvements Maintenance of Pumping Equipment Maintenance of Power Pumping Equipment Maintenance of Other Pumping Equipment Pumping Rents Total Pumping Expenses 30,000 30,000-10,000 10,000 Prepared by tdichael D. GtWh 1/2/2005 Page 1 of 3

23 741.O Treatment and Disuosal Expenses Operation Supervision and Engineering Operation Labor Purification Supplies and Expenses Supplies and Expenses Chemical Treatment Expenses Maintenance Supervision and Engineering Maintenance of Structures and Improvements Maintenance of Treatment and Disposal System Equipment Rents Total Treatment and Disposal Expenses 130, ,000 Billinq and Collectina Expenses Supervision 781.O Flat Rate Inspection Meter Reading 40, Billing Collecting and Accounting Uncollectible Accounts 5, Rents Total Billing and Collecting Expenses 45, O O Administrative and General Exuenses Administrative and General Salaries Other General Office Salaries Expenses of General Officers Expenses of General Office Employees General Office Supplies and Expenses Management and Supervision Fees and Expenses Special Services Special Legal Services General Accounting Services Special Accounting Services Audit Services Regulatory Commission Expenses Insurance Injuries and Damages - Workers Compensation Employee Welfare and Pensions TOIT: FICA / Medicare / WV Unemployment Miscellaneous General Expenses (Includes Admin. Fees) Transportation Expenses Maintenance of General Property Rents Total Administrative and General Expenses 83,000 13,000 14, ,000 Prepared by Michael 0. GMih 1/2/2005 Page 2 of 3

24 TOTAL OPERATION AND MAINTENANCE EXPENSES 325,000 OPERATING SURPLUS (DEFICIT) 625,000 Other Income and Other Deductions & Expenditures Other Income O Other Income Income from Merchandising, Jobbing, and Contract Work Income from Non-Utility Operations Revenues from Lease of Other Physical Property Dividend Revenues Interest Revenues Revenues from Sinking and Other Funds Misc. Non-Operating Revenues Non-Operating Revenue Deductions Total Other Income 2,000 2,000 Other Deductions and Expenditures Debt Service Interest on Long Term Debt Bond Principal Payments Notes Payable Principal Payments 531.O Other Interest 67, , Debt Service Reserve Funding Repair & Replacement Reserve Funding Total Debt Service 140,000 24, ,000 CaDital ExDenditures Misc. Capital Improvements-Labor Misc. Capital Improvements-Materials Less CIAC, Etc. Total Capital Expenditures 15,000 15,000 Net Surplus/(Deficit) Available ADOPTED BY THE BOARD: NOLA ROSE, MAYOR AND CHAIRMAN DATE DEBT COVERAGE RATIO 140.0% Prepared by Michael D. Griffith 1/2/2005 Page 3 of 3

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29 Run: at 359 PM Water Customers Water ConsumDtion Water Billing Sewer Customers Sewer ConsumDtion Sewer Billinq Residential 1,097 5,098,504 25, Residential Flat Commercial 117 1,375,750 6, Commercial Flat Public Authority d 89, ,230 6,563,674 32, Resale 1 4, Penalties Tap Fees Reconnect Fees ,426 37, Garbaae Customers Garbaae Billing Residential 595 6, Commercial Commercial Special , , Penalties , Residential 1,462 Residential Flat 50 Commercial 113 Commercial Flat 02 Public Authority 1,634 Penalties 268 Reconnect Fees 0 6,281,937 50, , ,I 89,330 10, , , ,622,887 64, , ,902 66, KoDDerston Customers Komerston ConsumDtion KoDDerston Billing Residential 423 1,463,825 12, Commercial 3 15, Public Authority 3 3, ,482,265 13, Penalties Reconnect Fees , Utility Tax 716 1,I 00.53

30 .&la A. Rose, Mayor Sharlene J. Cook, Recorder/Treasurer Lela Walker, Attorney Town of Oceana P.O. Box 190 Oceana, West Virginia (304) (304-) Members of the Council Jack Elkins Clark Manning Johnny Aliff John Roach Jim Pennington March 18,2005 Legal Advertising Department Raleigh Register Herald P.O. Box 2398 Beckley, WV Dear MadamISir: Print the two attachec Tariff Form io. 12 for a two-phase sewer rate increase as a Class I1 legal advertisement, with the first publication to be made within five days of March 17, Please send a copy to your newsroom as a press release. Since this is a matter of vital public interest to many of your readers, I encourage you to print a news article containing information reflected in the Tariff Form. As soon as the second publication has been made, please provide me with an affidavit of publication and a tear sheet containing the newspaper article. Thank you for your cooperation in this matter. Very truly yours, Lela Walker Attorney for the Town of Oceana