Flo Water approves a rate increase and accepts a million dollar line of credit

The Flo Water Board of Directors voted Thursday, February 11th to accept a million dollar line of credit from Community National Bank and to institute a graduated rate increase that will be very gentle on the lower end users. The Board agreed to pay 7% interest on the money used from the line of credit, during their regular monthly meeting at Celebration Church. Community National Bank was represented at the meeting by Loan Officer Jerry Don Sanders.

The first use of the available funds will come at the contract signing. Under terms of the contract, the remaining debt holder from the Flo Water bankruptcy, Palestine Water Well Service, will be completely paid off, along with the remaining debt on the WETS system purchased by the previous administration.

This process will leave Flo Water free to address TCEQ mandates concerning shortcomings in the existing system. These mandates must be satisfied or the water system is subject to ongoing fines until they are fixed. Primarily the mandates concern shortages of water supply and water storage.

At their monthly meeting last month the Flo Water directors gave the go-ahead to Womble Drilling to complete the first phase of a new well in the Weedon addition.

During the rate discussion, Director Richard Moran pointed out that it was necessary to protect the users who consumed the least amount of water and were often on fixed incomes. The directors generally agreed that they had done without a rate increase for several years and felt that, with the ongoing challenges facing Flo Water, they must adjust the rates to keep up with inflation. The board voted for a change in the rates that would increase the minimum monthly rate to $38 which would include the first 2000 gallons of water. The rate will then increase to $3.50 per thousand gallons for users between 4000 and 8000 gallons. Users of between 8000 and 20,000 gallons will pay $4.50 per thousand gallons for those extra gallons and the 28 users who consume over 20,000 gallons monthly, (which constitutes nearly 20% of FCWS’ total water usage) will pay $6.00 per thousand for those extra gallons. The decision to increase the rates then passed by a unanimous vote.

Director Wallace Jones asked that it be recorded in the minutes of last month’s meeting that he voted against authorizing Womble to begin drilling because he thought that the corporation should wait until the loan was approved. The vote was reported in the Buffalo Press as being unanimous.

The Board was told by its attorney that it must stay in compliance with TCEQ regulations and could not grant relief to a customer who had requested a variance in regard to the prohibition of multiple hookups. The Board then voted unanimously to continue the rules as they are at this time.