POWDERSVILLE - During its monthly meeting this past Thursday, the Powdersville Water District Board of Directors approved a 9 percent rate increase for retail customers that will become effective with the January 2009 billing.

The recommendation for the increase was the result of the district's annual budget and rate modeling process. Each year the District completes an annual update of its comprehensive Cost of Service Rate Study to ensure that rates are adequate to cover projected expenses for the coming year.

The rate increase is impacted by several factors:

* Two out of three of the district's wholesale water suppliers plan to increase their rates by as much as 10 percent in the coming year.

* The district plans to construct two large capital improvement projects in 2009 that will require new borrowing, thereby increasing the District's debt service significantly.

* The District continues to replace and upgrade small water mains that were installed 30 years ago to facilitate customer growth.

* Extensive utility relocation work caused by new County and State highway construction continues to add to District expenses.

* Daily operational expenses such as fuel continue to be on the rise.

"We know that these are tough economic times for many of our customers and the timing of this increase is unfortunate," said Powdersville Water General Manager Dyke Spencer. "Four years ago, our Board of Directors embarked on a multi-year program to build infrastructure that would bring this water system from a small rural system to a medium-sized system to ensure that we keep up with the growth demand that our community continues to experience. Since that time, the district has invested over $6 million in infrastructure to improve and upgrade the overall operation of the water system. As part of these improvements, in 2009, we will be constructing a new elevated water tank off Highway 153 and approximately four miles of 12-inch water main in the south end of the system that will significantly improve water pressure and fire flows throughout the distribution system. These two projects alone are estimated at $3.5 million. Most of these funds will be in the form of a low-interest loan from the State."

"We do not enjoy raising rates," said Board Chairman Norb Steeber. "But we believe that this is a small price to pay for the numerous improvements that we are continually making to the system. Even with the increase, our water rates remain average when compared with other utilities across the state. A typical customer that uses 6,000 gallons per month would see approximately a $2.30 increase in their monthly bill. Another good way to quantify the cost of our water is that the District currently delivers 100 gallons of safe drinking water to our customers for about 38 cents. Compare that with about 4 ounces of bottled water that consumers purchase every day for the same price."