PSC Working To 'Fill In Gaps' As Lake View Sewer System Nears First Public Rate Hearing

LAKE VIEW, AL — Monday marks four months to the day that the Tannehill Sewer System and its operator ECO Preservation Services were officially brought under the regulatory oversight of the Alabama Public Service Commission, which followed a statewide referendum last year that overwhelmingly passed in favor.

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As Patch previously reported, Lake View was first incorporated in 1998 and the following year granted exclusive sewer rights to J. Michael White and SERMA — the parent company of ECO Preservation Services.

Over the last three decades, residents have complained and taken legal action regarding sewer rates that have continually risen, along with pointing out questionable business practices on the part of the owner.

Following the passage of the statewide amendment regarding the private sewer system last November, the PSC has been in the process of requesting rate information and other data relating to ECO Preservation Services, LLC — the firm owned by White that serves as the operator of the sewer system.

Attorneys for the company filed a motion on Tuesday, April 25, and argued that the Commission's data request did not allow for "reasonable time" to respond to its request.

However, in its ruling the Commission notes that ECO Preservation Services did not mention in its motion that the data requested would be used to "fill in gaps left because the Company failed to provide complete information to support its service rates as required [by a Commission order on April 11]."

Sewer rates have long been at the center of the controversy, which Patch has reported on extensively, including the $4.7 million series of judgements handed down against White by a Tuscaloosa County circuit judge after the sewer rates for a handful of residents resulted in collective sewer bills climbing to over $500,000. White has appealed the judgements in federal court and there's yet to be a resolution in the matter.

Indeed, as one Lake View resident told Patch in February 2022, she and her daughter first moved in to their current home in 2013, when the flat rate for the private sewer service was $36.50 a month. This was her only option, she explained, as the cost and hassle of installing a septic system was out of the question. Since her move, however, the rates and fees have steadily climbed, with the present flat rate for sewer service at $126.

This does not include water service or any other utility service.

In its procedural ruling handed down last week, the PSC said while it recognizes that ECO Preservation has provided documents to proceed with its certification and rate-setting process, commissioners do not believe the information provided thus far is sufficient to determine "reasonable rates" for the customers of the private sewer system.

The PSC insisted its timeline for its request was not unreasonable given the constitutional time requirements

According to Ala. Admin. Code r. 770-X-9-.03, "all wastewater management entities who seek a Certification of Financial Viability, except those who have already had their financial viability verified by the PSC Staff and approved by [the Alabama Department of Public Health (ADPH)] ... shall file an application with the PSC seeking such certification of their financial viability. A Certificate of Financial Viability must be issued by the PSC prior to the issuance of a new operating permit by [Alabama Department of Environmental Management] or ADPH."

If White indeed turns over the requested information, it would provide the most accurate glimpse yet into not only the present state of the system's business practices, but also an extensive breakdown of the infrastructure making up the private sewer system.

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Here's a look at what is being requested by the PSC as part of its Certification of Financial Viability:

• Full and accurate name and address of the applicant.
• Character of the organization; e.g., corporation, LLC, partnership, or individual proprietorship.
• Proposed tariff showing all rates, classifications and charges for service of every kind furnished or to be furnished and all Rules and Regulations.
• Worksheets for rates, detailing the data and calculations used to arrive at such rates which must be cost-based.
• Detailed description of proposed service area including service area map.
• Detailed description of the wastewater system(s) including a description of the collection system(s) and the treatment facility(s).
• Copy of franchise agreement(s) and/or approval(s) of municipal authorities (or county permits).
• Estimate, in reasonable detail, of the cost of proposed construction.
• Draft operational permit number(s).
• Estimated revenue to be derived from this operation, indicating the estimated number of consumers in each classification of service. Include and itemize estimated revenue to be derived from vacant lot fees or sewer system access fees.
• Copies of operators/installers licenses.
• 13. Copies of all contracts pertaining to wastewater system(s) to which the company is a party.
• Copies of all relevant deeds and trust indentures.
• Copies of all regulatory compliance enforcement documents received by applicant in the last two years.

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Still, despite the issues raised by the PSC in its lasted ruling, commissioners ultimately allowed for an extension for ECO Preservation to respond to the request. While the previous deadline was April 26, it has now been extended to the close of business on Friday, May 5.

As a result, the hearing date set for Wednesday, May 3 has now been moved to Tuesday, May 11.

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