Published Tuesday, May 06, 2008 9:30 AM
Updated Tuesday, May 06, 2008 9:31 AM

 

County approves water and sewer rate hike

There may be a light at the end of the tunnel after all … and no, it’s not an oncoming train.

On Monday night, Berkeley County Council tied off a few loose ends and took the first steps in solving a major headache and a political black eye when it approved a 30 percent increase in county water and sewer rates.

The rate increase was a necessary step to take in order to compensate for a more than $6 million shortage in its annual budget and prove to bond credit grantors that Berkeley County had its fiscal house in order. The increase will help the county out from under the synthetic fixed rate bond note situation that has plagued council since the start of 2008.

The 30 percent water rate increase will allow the county water and sewer authority to refinance the red herring synthetic fixed rate bond note into a less risky conventional bond, a move that will still cost Berkeley County almost $3 million in buy-out fees.

Council tried to quickly push the new ordinance through the required three-reading approval process back in February but hit a snag as council battled the clock and rapidly rising interest rates.

Issuers of the new bond demanded the county take some form of proactive action to demonstrate fiscal soundness. Council members said it had little choice and proposed the rate increase.

In January when the adjustable rate mortgage market imploded, the county’s bond insurer lost its AAA credit rating which resulted in skyrocketing interest penalties escalating to more than $25,000 a week.

The rate increase ordinance was approved by a 7-1 vote.