(02/13/2012)
By David Hedges

The Times Record/Roane County Reporter

A few more residents of southern Calhoun County in need of public water but not included in an extension by the Mt. Zion Public Service District might be served if the PSD is able to pursue provisions in the contract that deal with liquidated damages, officials confirmed Friday.

The Mt. Zion PSD was awarded $5.2 million for a 21-mile waterline extension in what has been called the largest infrastructure project in county history.

After years of delays, construction that was supposed to start in May 2010 began in August of that year.

In December 2011 the project was six months behind the scheduled completion date, PSD vice chairman Roscoe "Cokey" Gainer said at the time.

Gainer said then that the contractor, Bruce Allen Pipeline, was granted a two-month extension for weather problems, but was still four months behind the extended deadline at that point.

Gainer said the contract included financial penalties if the work was not finished on time.

At the PSD's last regular meeting in January, project engineer Jim Hildreth said work on the waterline installation was not expected to be done until the end of February.

The USDA awarded the funds to the Mt. Zion PSD for the project that would serve 200 customers along W.Va. 16 south of Arnoldsburg and U.S. 33/119 to Sand Ridge.

Financial penalties, also known as liquidated damages, can be awarded if a PSD or other governing body can show that they have been harmed financially, such as being denied revenue from customers that would have been served had the system been in operation, Alan Harris, USDA Area Director said Friday when he was in Spencer for a grant announcement involving the Roane County school system.

The Mt. Zion PSD charges customers $43.52 for 4,500 gallons, which is considered average usage, according to W.Va. Public Service commission rankings updated last week.

At that rate, the 200 customers to be added would have meant nearly $8,700 more revenue per month to the Mt. Zion PSD, or more than $52,000 in revenue over six months.

Harris said the USDA does not make the decision to pursue liquidated damages.

"That's a decision the governing body would have to make," he said. "They enter into contracts and we review them to make sure they are correct."

Residents of several areas have already requested extensions to provide service to their homes. At the PSD meeting last month residents of Sears Run presented a petition with signatures of 12 persons requesting water.

Residents of Crummies Creek, Enon, Milo Road, Poling Road, Spring Run and the Deo Mace farm have also requested service.

The requests range from service for one customer to as many as 14 customers, with projected costs of just over $30,000 to nearly $400,000.

At the January meeting, Hildreth told PSD members they would probably have enough excess funding to do two of the extensions and part of a third.

That did not include any additional money from the contractor for liquidated damages.

So far, the Mt. Zion PSD has not sought penalties against the contractor.

The February Mt.Zion PSD meeting is scheduled for 6 p.m. Monday at the Arnoldsburg Community Building.


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