
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, August 18, 1993                   TAG: 9308180097
SECTION: CURRENT                    PAGE: NRV5   EDITION: NEW RIVER VALLEY 
SOURCE: PAUL DELLINGER STAFF WRITER
DATELINE: PULASKI                                LENGTH: Medium

FULL WATER-RATE REPORT PROMISED IN NOVEMBER

Town officials met Tuesday morning with representatives of the national consulting firm that will study water rates and make recommendations on changing them.

Ellen Erhardt and Lisa Sharpe from Ernst & Young in Washington said the study would be complete early in November. "We're committed to doing this project in a 12-week time frame," Erhardt said. They also will make recommendations by mid-September on across-the-board rate increases under the existing structure, to start getting the water fund in better financial shape in the 1993-94 fiscal year. Rate-structure recommendations will come at the end of the study.

"That would be totally unacceptable to me, based on our present rate structure," Councilman Andy Graham said of the interim increases. Graham was one of those on council who opposed hiring consultants to study town water revenue. He said council should do the job itself. But he has long called for rate-structure changes to stabilize the water fund.

"Our system needs so much service . . . and this should come out of the cash flow," he told the consultants. "We need to start building up a reserve for this type of thing. . . . I hope you'll be totally objective and not be influenced by pleas from anyone."

"We certainly will be objective," Erhardt said. "What we bring to this project is independence and objectivity and, I think most importantly in this case, what industry practices are." Ernst & Young has about 300 clients nationally.

The consultants will recommend water rates for the next five fiscal years to make sure the operation is financially self-sufficient, help with planning and capital projects coming years, and suggest rate-structure changes, Erhardt said.

Graham noted that two Pulaski industries use more than half the town's water, but they get breaks through volume discounts that he opposes. Erhardt said the consultants would seek a rate structure that could be defended against any challenge by an industry.

"A lot of members of council really agonized over whether we needed the study or not," Mayor Gary Hancock said. But a majority on council opted for the study, he said, and "we look forward to working with you."

by CNB