Officials to consider Pratt Waterworks' IRS debt before purchase
CHARLESTON, W.Va. - Pratt Waterworks' debt to the Internal Revenue Service will be one of the items looked at when West Virginia American Water officials decide whether to purchase the struggling town water company.
"It's part of the larger picture that we would have to consider," said Laura Jordan, West Virginia American Water spokeswoman.
The IRS has placed tax liens on both the city and the city-owned waterworks for unpaid taxes.
County and city leaders have been working on a deal to sell the town water company to West Virginia American Water.
County commissioners recently learned the town-owned water company owes about $46,000 in back taxes, penalties and interest. The town itself also owes about $96,000 in back taxes.
The town also owes about $247,000 on the water treatment and distribution facilities, Commission President Kent Carper said.
"That part of the debt isn't that bad," he said. "That can be managed."
However, West Virginia American Water officials are still looking over the Pratt financial records.
"We're just not at a place where we can propose a deal yet," Jordan said.
She couldn't say when a deal would be put before town leaders.
County Commissioner Dave Hardy is a native of Pratt, and his parents still live in the small eastern Kanawha County community.
Hardy hopes to get the deal done sooner rather than later, and he has even said he would support having the county pay for a special election to place the issue before town voters.
Town voters would have to approve any sale.
"I think we're going to expedite the election and try to have it as soon as possible," he said.
The general election is on Nov. 6 and Hardy hopes to have the issue before voters no later than that date.
"And we're going to have an independent person look at Pratt's financials," he said.
Carper also would support paying for a town election.
"We need to get this done as soon as we can get it done," Carper said. "This needs to be fixed."
West Virginia American Water would have to make a significant investment in the Pratt water system to bring it up to par, Carper said.
Jordan said the company would have to modernize the water treatment plant, and she could not estimate that cost.
However, the company's long-term goal is to regionalize water service, she said.
That means the company likely would tie the town's water system into a larger system supplied by West Virginia American Water's Kanawha Valley Water Treatment Plant in downtown Charleston, she said.
"Our treatment plant is capable of taking on new customers," she said.
The downtown plant serves about 200,000 customers in several counties including Kanawha, Boone and Putnam, Jordan said.
"But that wouldn't happen immediately," she said. "It would take a significant amount of time to make that happen."
Jordan also could not say if the company would increase water rates for Pratt customers.
However, Pratt customers are currently paying more than West Virginia American Water customers, according to figures provided by the county commission.
The minimum bill for a West Virginia American Water customer using 1,500 gallons of water per month is $21.67, according to the figures. The minimum bill for a Pratt water customer using 1,500 gallons of water per month is $36.90.
"That was something I was surprised to see," Carper said.