Buckhannon residents could soon see their average monthly water bills jump by more than $15 as city leaders move ahead with a $47 million plan to build a new water treatment plant and overhaul critical pipelines — an investment officials say is crucial for keeping clean water flowing to thousands of homes.
The Buckhannon Water Board has discussed the project, including the final price tag and potential funding sources, during meetings in April, May, and June.
The water board is collaborating with Potesta Associates, an engineering firm based in Morgantown; Steptoe and Johnson, a law firm from Bridgeport; Smith, Cochran, and Hicks, an accounting firm in Charleston; and the Region VII Planning and Development Council on the project.
Timothy Ball, a chief engineer with Potesta Associates, said the funding would include approximately $14.5 million in grants, a $32 million loan from the USDA and a $1.5 million loan from the West Virginia Drinking Water Treatment Revolving Fund.
Those funds would cover the entire $41 million new water plant and an additional $6 million to replace critical but aging pipelines along Main Street and Route 20. However, to complete the project, Ball said a rate increase of approximately 62% would be necessary, resulting in the average city water bill rising from $27.26 to $44.14 per month.
City recorder Randy Sanders explained why the city is opting to build a new water plant instead of rehabilitating the existing plant on Randolph Street.
“Potesta and Associates did a complete end-to-end inspection of our current water plant, and they provided us with a study that showed how much money it would cost to completely rebuild certain sections of the plant, because so much of it is outdated,” Sanders said. “It would have to be retrofitted for new water treatment requirements and updated to stay consistent. To continue to treat water effectively and in a way that we want it treated, it would cost almost as much over the next 10 or 15 years to retrofit everything in the old plant, versus building a new plant.”
Sanders said a rate increase is necessary to cover the cost of constructing the new plant and maintaining the existing water plant during the transition. The water board, which oversees the Buckhannon Water Department’s operations, is a separate, distinct ‘enterprise fund’ and not part of the city’s general fund, unlike the police and fire departments.
“In order to repay a loan with the interest that will be involved, we will have to raise the rates an appropriate amount to fund the loan repayments,” he said. “That’s why we have to have rate increases, in order to repay the loan for the new water plant, and continue operating the plant we have today, until we switch over to the new water plant. And then we have operational costs with that water plant.”
Driving the rate increase is a calculation of water rates as a percentage of median household income, which is how the Public Service Commission ranks water boards across the state. As of June 20, 2025, Buckhannon was ranked 30th out of the state’s 329 water providers. That means Buckhannon residents currently pay less for water than 90 percent of the state.
But it also means the state feels Buckhannon isn’t charging enough. To qualify for funding for the new plant, officials said a size rate increase is required.
“If your percent MHI (Median Household Income) is below 1.25, they essentially consider that your rates aren’t high enough, that your community has not invested enough on its own,” Ball said. “It hurts your ability to borrow money from the state. Right now, your percent MHI is 0.7 percent, and that makes you an unattractive candidate competing with other communities around the state for limited dollars. The state would look at Buckhannon and go, ‘You know what? You guys aren’t carrying enough of your own weight.’”
Shane Whitehair, the executive director of the Region VII Planning and Development Council, said Buckhannon is one of the few communities that has kept rates low for a long time.
“If you’re not doing projects that seek public funds with these requirements attached, you’re just keeping those rates as low as possible, which you hardly see anymore,” Whitehair said. “Then, when you do a big project like this, those increases are pretty substantial, and it has a bigger impact on the user than if you had stepped it up every three years.”
Sanders noted that the exact rate increase is not locked in because the city is still looking at several avenues for funding the project.
“Until we hear back from the multiple funding sources and we know what the interest rates on the loans will be — and the Public Service Commission has to go through the statutory and a regulatory process — the bottom line is, we just don’t know what’s going to be required,” Sanders said. “When that process begins, we will have public meetings, readings of the rate change ordinances, which will have the PSC approval and what they feel is justified.”
The city is hoping to receive approximately $14.5 million in grant funding for the project in the best-case scenario, although Whitehair said that the number could fluctuate, as both state and federal funding sources are increasingly uncertain.
“We just don’t know what the future looks like, especially the federal side,” Whitehair said. “It’s not going to be as well flush as it has been, I can tell you that.”
Timing is essential, officials noted.
“The rate ordinance will have to be done prior to the loan closing,” Ball said. “All the lenders in the project are going to require your ordinances to be set to establish those rates.”
If implemented as outlined, the average city water bill would increase by about $17 per month.
“If that scenario works out as we’ve estimated, the rate increase would be a 61.9% increase, resulting in an average bill of $44.14 a month,” Ball said. “That compares to an average bill today of $27.26 per month, for 3,400 gallons.”
Officials have also discussed the timing of the increase — in particular, whether to do it all at once or in three roughly 20% increments. Todd Dingess, a CPA with Smith Cochran and Hicks, said starting early and phasing in the increases would be the ‘best thing for the community.’
“We could do 20 [percent rate increase] as soon as possible, and then 12 months later, 20 additional, and then the last 20 in the second or third year,” Dingess said. “It does have an advantage to starting the rate sooner, because we’re accumulating excess money that can be used to offset any potential loss of grant money or any additional increase in the loan. It is to our advantage to charge a higher rate sooner.”
“By implementing the rate increase early, you are being financially prudent,” Dingess added. “And ultimately, you’re doing the best thing for the community.”
Amby Jenkins, the Director of Finance and Administration for the City of Buckhannon, said city officials will have to investigate interim financing first and lock in the rest of the funding later.
“A group of us had a conversation about the financing, and that was very productive,” Jenkins said. “The gist of it is, we’ll need to probably borrow money ahead of time through a private bank for some of the purchases, the design plan and the property. Shane is going to be taking the lead on this and coordinating these with Tom Aman [with Steptoe and Johnson] and Todd Dingess. We’re going to meet again on July 7.”
The first phase of the rate increase may have to occur within the next 12 months.
“We’re probably going to come back and ask for some interim financing with the local banks, in which we would be paying some interest-only payments. I hate to throw out a whole lot of numbers right now, but Todd Dingess just emailed me this morning,” Jenkins said. “There may be a chance we’re going to have to have a phase one rate increase within 12 months to be able to take care of that interim financing, because we do need to get the property purchased and the appraisal.”
Jenkins reiterated that they don’t know the final number for the rate increases.
“This rate increase is going to be phased in, so it won’t hit customers all at one time,” Jenkins said. “We need to know what grants we’re going to have, and it’s hard to say what the rates will be right now. We have an idea, but we also need to phase in things in the meantime.”
Whitehair said it’s typical to apply for interim financing on a project of this size.
“We don’t want to wait on the financing that’s going to cover the construction to allow Potesta to get started,” Whitehair said. “It’s going to take two years to design the thing. You want to initiate that immediately to get that started, and then after the design is complete, we can roll over everything in the permanent financing and hopefully get all the grants funded and awarded so we can move forward.”
The city has submitted a Rule 42 exhibit, which refers to a specific type of filing made with the Public Service Commission for rate changes and charges for services. This application assesses whether a rate increase is necessary.
“We also submitted our application to the West Virginia Infrastructure and Job Development Council,” said Ball, the chief Potesta & Associates engineer. “It’s the West Virginia state agency responsible for funding water and wastewater infrastructure projects, and we’re waiting on them to take it up. They will not take it up until their meeting in July.”
The water board voted to proceed with the project and rate increases.
Whitehair acknowledged the increases won’t be popular, but stressed the importance of building the new water plant.
“There are a lot of folks that depend upon that plant; having good, clean potable water is pretty important,” Whitehair said. “How many households, how many customers, how many people, not only in this county, but in this region, rely on this particular water plant? It’s crucial.”
