On top of all of the billing issues, Kanawha PSD began falling behind on its bond payments to the West Virginia Water Development Authority, resulting in the PSD racking up over $200,000 in missed payments.
The Water Development Authority is a lender to government entities, and manages loan money from state government agencies. The authority functions much like how a bank operates in the private sector.
Kanawha PSD began missing payments after it was formed in March 2012 by a merger of the Chelyan PSD with the Upper Kanawha Valley Public Service District Sewer Authority. Kanawha PSD inherited the bonds from the now-defunct utilities.
The Water Development Authority filed a complaint with the Public Service Commission last summer, fearing that Kanawha PSD would continue to miss payments after getting behind nearly $9,000 by August 2012 - just five months after the utility's creation. By January 2013, the deficiency had ballooned to just under $199,000.
"They must meet their operations and management expenses before they pay the lending institution," said Water Development Authority Executive Director Chris Jarrett. "Consequently, they got behind on their loan payments."
As part of the agreement reached through the West Virginia Public Service Commission, all money Kanawha PSD receives from East Bank and Cedar Grove will be put toward its bond debt.
But, even with the money obtained from Cedar Grove, East Bank and domestic customers, the Kanawha PSD still won't be able to meet its loan obligations, which may force another rate increase.
According to Public Service Commission documents, Kanawha PSD maintains that former billing clerk Donna Hively created the billing error. The PSD said that Hively under-billed Kanawha PSD customers and also changed the gallon usage numbers for East Bank and Cedar Grove.
Hively was terminated in August 2012 for "dereliction of (Hively's) duties."
As of March, the PSD had not taken legal action against Hively or filed a performance bond claim with the PSD's insurance provider in relation to Hively's employment.
In addition, Kanawha PSD stated that a computer issue at the time of the utility's creation also played a role in the incorrect billings. A new computer system was purchased that the PSD hopes will prevent such massive billing discrepancies in the future.
Kanawha PSD declined to comment for this story because the final agreement between the PSD, East Bank, Cedar Grove and the Water Development Authority is still pending before the Public Service Commission.
A PSD employee said that South Charleston lawyer H. Wyatt Hanna III could respond to inquiries, but Hanna did not respond to an interview request in time for publication.
But little can change the fact that customers in East Bank, Cedar Grove and elsewhere will still be paying for errors caused at Kanawha PSD for months and years to come.
"I don't want any hard feelings toward Chelyan . . . they're our neighbors," Blair said. "But I don't feel the residents of East Bank should have to pay for it."
Contact writer Matt Murphy at Matt.Mur...@dailymail.com or 304-348-4817.
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