Regionalization Success Story McDowell County Public Service District

1. Regionalization Success StoryMcDowell County Public Service District Mary HutsonState Coordinator

2. McDowell County • The southernmost county in the WV • Covers 535 square miles • The county is roughly in the shape of a semi circle, with its borders following the Appalachian Mountains • Popularly referred to as the "Free State of McDowell“ or “The County”

3. McDowell County • Most notably known for • Homer Hickman-NASA • Steve Harvey-TV • Gordon Lambert-NFL • Currently President of the McDowell County Commission • Bobby Lewis • Former USDA WV State Director

4. Firsts • 1913-Public children’s playground from private donation • 1923-Memorial building in US, dedicated to World War I • 1928-African American woman legislator • Minnie Buckingham Harper appointed to WV House of Delegates to fill vacancy after death of her husband • 1941-Municipally owned parking garage • 1960-In total coal production in US • 1961-Issuance of federal food stands

5. McDowell County & Coal • Located in the heart of Appalachia • A mountainous region with a colorful and complex history • From the 1920’s through the 1950’s, the area was fueled by coal mining money • Even at the beginning of the coal mining industry, when the companies shipped families in to work and live in these hills, communities became dependent upon the company for everything - their livelihood, their homes, even the groceries they bought at the Company store.

6. McDowell County & Coal • The Company built the infrastructure of the coal camps, bought up all the land in the mountains, brought in the doctor, and built the schools and churches. • They provided everything to support the workforce. • The economy was wholly dependent upon coal.

7. Coal Companies • A coalfield map of McDowell and surrounding counties.  7

8. Infrastructure Challenges • Mountainous regions like southern West Virginia have an abundance of water, but the terrain creates challenges • Many of these communities were constructed from scratch in and around the v-shaped hollows, which split the wooded mountains that blanket this region’s landscape.

9. Boom Times • By 1950 McDowell County had a population of 98,887 • Communities were still isolated • Population mostly in Coal Camps • All services, including drinking water, were provided by the Coal Companies

10. Coal’s Legacy in Appalachia • By 2000 the population dropped to 27,329, a ~ 72% decline from 1950 to 2000 • The Coal Was Gone ! • Over forty small Coal Camp communities were still in place • As mining companies close, water systems fail • As the mining industry here weakened, coal company water systems changed hands

11. Coal’s Legacy in Appalachia • Most Coal Company water systems were sold • Either to the community or to a private entity • The private operators who took over systems from the coal companies often neglected upkeep • Customers were charged flat rates for poor service and even poorer quality • Systems were poorly maintained and the water was unsafe • These people ran them not putting the revenue back into maintenance

12. McDowell County Water Company • By 1971, a private utility known as McDowell County Water Company controlled water service in Coalwoodand Caretta and 12 other communities • These water systems were already nearing the end of their usable lifespans and that the company allowed them to deteriorate further.

13. Fall of McDowell County Water Company • 1987 Olga Coal Company Owner/Operator filed bankruptcy and shut down all mining operations • Sold the McDowell County Water Company (private) • Resulting in unacceptable water quality • Coalwood =Iron • Caretta = Manganese • Water at the Caretta plant

14. Fall of McDowell County Water Company • Repeated complaints to McDowell County Water Company achieved no results • Going without water or boil water advisory is a way of life for some people in the coalfields. • Angry customers refuse to pay water bills • Other continue to retain right to complain about services • All customers were forced to haul water for daily household needs

15. Fall of McDowell County Water Company • The mountain spring in Maybeury is often crowded with folks gathering water for their homes.

16. Big Creek People in Action (BCPIA) • Community residents lead by Frankie Rutherford resolved to take legal and political action to secure clean water for McDowell County • With the pro bono assistance of a local attorney, BCPIA goals were to force McDowell County Water Company to fix the existing supply problems, and to seek compensation for damages to fixtures and appliances

17. Fall of McDowell County Water Company • March 1989-WV Public Service Commission (PSC) found McDowell County Water Company to be: • “Providing grossly inadequate water service to its customers” • The management and operation to be “inadequate, inefficient, and irresponsible” • The ownership and officers, unresponsive to the needs of the customers. • The court ordered the company to take specific steps to remedy this situation

18. Fall of McDowell County Water Company • October 1989-little had been accomplished by the water company, the Commission found McDowell Water to be “irresponsible” and “unresponsive” • Ordered receivership proceedings begun against the company • Absentee owner/majority stockholder of the company was found guilty on seven criminal misdemeanor counts • The company owner was fined $500 and sentenced to serve 90 days home confinement on each count, to run consecutively

19. McDowell County Commission • Company assets were turned over to the McDowell County Commission, the only existing form of government for the small unincorporated communities in the service region. • The Commission was initially inclined to place the water system in the control of another private operator, but BCPIA was vehemently opposed to this idea

20. Formation of McDowell County Public Service District • Bobby Lewis, McDowell County Commissioner, recommended that communities would be better served by retaining local control through the organization of a Public Service District (PSD) under the auspices of the County Commission • PSDs are public corporations established by county commissions with approval of the WV PSC to develop and maintain water systems

21. Why a Public Service District? • Centralized management, billing and record keeping • Eliminate need for highly trained people at every community • Larger customer base • Ability to hire and keep skilled employees • Better access to funding • Able to seek state and federal funding for rehabilitation and extension of the system

22. Formation of McDowell County Public Service District • McDowell County PSD was established in 1990 after a long series of hearings which several members of the local commission resisted undertaking this responsibility. • Frankie Rutherford, one of the prime advocates for a solution to the region’s water problems was appointed as Director of the newly formed district, and became one of three members of the oversight board.

23. Governing Body • Three Board Members appointed by the McDowell County Commission for 2 to 6 year terms. • Regulated by the West Virginia Public Service Commission. • Continued to acquire and upgrade other small communities as money is made available

24. McDowell County PSD • The new District found itself in possession of failed water company’s assets and infrastructure disaster. • The PSD began operating 10 water systems serving 14 communities. • Initially six employees, of which only 1 was certified • 4 field staff • 2 office staff

25. McDowell County PSD • Working together, the PSD applied makeshift solutions to the most urgent problems until funding could be obtained to provide long-term remedies. • System personnel had to travel 120 miles each day just to check the small treatment plants. • And forget water loss percentages! • Just keeping water in the decaying lines is a triumph. • It is a minute by minute struggle most of us could never envision.

26. Timeline • 1992-New water system • The first new water systems were constructed for Caretta and Coalwood, the worst cases, with the aid of federal funds obtained from the RUS program. • Almost overnight 350 households had access to something most people take for granted, a dependable supply of safe drinking water. • 1993 - all 14 communities in the Big Creek service area had been provided with potable water and reliable service.

27. Timeline • 1999-purchased the failing Iaeger City Water • 2004-accepted responsibility for Big Four PSD • 2007-accepted responsibility for the private water systems Kimball and Elkhorn • 2009-Jolo/Paynesville Project Phase I & II-upgrade Bartley WTP new service to Jolo & Raysal • 2010-Anawalt’s water source diminished to point where it could no longer supply the town • 2012-Jolo/Paynesville Project Phase III & IV • New water service from Bradshaw mountain to Paynesville

28. Timeline • 2014-Elkhorn Water Project-Phase I brought a new water system to Elkhorn, Maybeury and Switchback • 2016-Crumpler and Ashland-assisting with O&M, due to no certified operator- not official customers

29. Elkhorn Water Project-Phase I • Elkhorn water tower believed to be at least 60 years old.

30. The Maybeury Plant

31. Intake at

32. Maybeury Intake Building

33. Future Projects • Elkhorn Phase II - will also replace systems in Northfork and Keystone with water from the Maybeury plant • Keystone have been on a boil water advisory since 2010 • Northfork has been under an advisory since 2013 • Elkhorn Phase III - will replace the Kimball plant with water from the Maybeury plant and upgrade water lines to the county line

34. Future Projects • Phase IV – provide service to customers up Northfork hollow, which will include Ashland & Crumpler • Both Water Associations which are roughly 26 miles from Coalwood

35. Ashland & Crumpler • About 26 miles east of Coalwood, a former coal mining community has 26 customers (population of about 40 to 50) • When the company shut down in 1979, the community took over • George Oster has lived there since 1944 and been involved since the beginning • local residents maintain the water system on their own, but expect that the public service district will soon take it over—a positive development in his view.

36. Ashland & Crumpler • Oster said he’s been involved with Ashland Community Water since it began • Currently 26 water customers in town • Flat fee of $15 a month • No meters • Water comes from the abandoned No. 3 mine, it’s chlorinated and flows into a storage tank. • The system is all gravity fed, no pumps • Oster is certified and takes compliance samples and monthly reporting

37. Ashland & Crumpler • When something breaks, one resident is the maintenance man • Someone in Crumpler, a community up the road, has a backhoe that can be used to dig up deep water lines. • We just take care of our own leaks and everything • Oster moved to North Carolina in late 2016

38. McDowell County PSD’s 2018 • Since its inception, the McDowell PSD has continued to expand its role in the county • Taking over and upgrading small private community systems in trouble, one or two at a time • Building new treatment plants when needed • Often using groundwater extracted from deep abandoned mines • The PSD’s customer base has grown to about 3,064 from around 500. • It now operates 16 water systems.

39. Technical Capacity • Three New Treatment Plants Were Constructed to Replace 8 Old Plants, And Serve 16 Communities. • Nine Communities Were Connected to Three Existing Treatment Facilities Owned and Operated by Entities Other Than the PSD. • The PSD also Operates 2 Other Treatment Plants Which Were Turned Over to Them by the Public Service Commission, After Being Placed in Receivership

40. Technical Capacity • The PSD's water system consists of • Approximately 769,691 feet (146 miles) of 12-inch and smaller water line • 26 water storage tanks • 23 booster pumping stations • Numerous valves, fire hydrants, individual customer services and other related items.

41. Technical Capacity • The PSD’s Assets • A significant amount of maintenance and construction equipment including: • An excavator • 2 Backhoes • A dump truck • 2 equipment trailers • As well as such smaller items • The service fleet includes 9 various sized vehicles fitted with a radio to maintain excellent lines of communication between all employees throughout service area.

42. Managerial Capacity • The District takes great pride in the quality of its operations. • It has established programs to monitor such critical, but often over looked, aspects of its operations such as water accountability, meter testing, inventory control, vehicle O&M expense, etc. • To extend the life of its systems and improve reliability the District has developed and implemented an aggressive preventive maintenance program.

43. Managerial Capacity • The District has computerized and integrated its payroll, billing system and other financial records. • The computer system is networked and sized to handle projected growth for many years. • Meters are being converted to "touch read" and "radio read" as funds allow to further improve accuracy and efficiency. • Approximately 700 of the District's meters have been converted to date.

44. Financial Capacity • Financial challenges exist as well. As the district has made upgrades, borrowing has stacked up, much of it in the form of loans • The district’s most recent annual report shows that in June 2016 it had $7.4 million of long-term debt, roughly quadrupling from its 1999 level of $1.7 million. • Operating revenues during the district’s 2016 and 1999 fiscal years were around $1.8 million and $612,000 respectively.

45. Financial Capacity • We have a tremendous amount of loan debt,” Brewster said, adding that monthly payments total about $32,000 • She didn’t seem panicked about the district’s debt load • The district charges $26.84 per month for up to 2,000 gallons of water.

46. Financial Capacity • O&M alone for the 16 water systems the district oversees amounts to a tall order • These individual systems, spread across the county, create additional burdens with reporting and water sampling • Just performing daily systems checks requires workers to drive about 300 miles

47. Planning for the Future • The District has, for the previous several years, been making decisions based upon its twenty-year plan in order to prepare for expansion into additional areas.

48. The Experience • The District Board has a combined total of over 20 years of service and is comprised of highly motivated business oriented individuals. • The District employs a knowledgeable and experienced individual as its General Manager. • It's Staff of 15 includes 8 water system operators with over 75 years of combined water system related experience.

49. PSD Staff • Of the 15 employees • The office staff consists of 2 people who handle billing, collection and all bookkeeping from a centralized location • The field staff consists of 12 people, including a manager, who also operate from a centralized location • The field staff is responsible for plant operation as well as distribution system O&M